IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfe/2019-04.html
   My bibliography  Save this paper

Karl Brunner and U.K. Monetary Debate

Author

Abstract

Although he was based in the United States, leading monetarist Karl Brunner participated in debates in the United Kingdom on monetary analysis and policy from the 1960s to the 1980s. During the 1960s, his participation in the debates was limited to research papers, but in the 1970s, as monetarism attracted national attention, Brunner made contributions to U.K. media discussions. In the pre-1979 period, he was highly critical of the U.K. authorities? nonmonetary approach to the analysis and control of inflation-an approach supported by leading U.K. Keynesians. In the early 1980s, Brunner had direct interaction with Prime Minister Margaret Thatcher on issues relating to monetary control and monetary strategy. He was unsuccessful in persuading her to use the monetary base-instead of a short-term interest rate-as the instrument for implementing monetary policy. However, following his interventions, the U.K. authorities during the 1980s assigned weight to the monetary b ase as an indicator and target of monetary policy. Brunner?s imprint on U.K. monetary policy has also been felt in the twenty-first century. Brunner?s analysis, with Allan Meltzer, of the monetary transmission mechanism helped provide the basis for the policy of quantitative easing followed by the Bank of England.

Suggested Citation

  • Edward Nelson, 2019. "Karl Brunner and U.K. Monetary Debate," Finance and Economics Discussion Series 2019-004, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2019-04
    DOI: 10.17016/FEDS.2019.004
    as

    Download full text from publisher

    File URL: https://www.federalreserve.gov/econres/feds/files/2019004pap.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.17016/FEDS.2019.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Posner, Michael V., 1978. "Problems of the British economy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 9(1), pages 5-32, January.
    2. Mauro Boianovsky, 2012. "Celso Furtado and the Structuralist-Monetarist Debate on Economic Stabilization in Latin America," History of Political Economy, Duke University Press, vol. 44(2), pages 277-330, Summer.
    3. Brunner, Karl & Meltzer, Allan H, 1977. "The Explanation of Inflation: Some International Evidence," American Economic Review, American Economic Association, vol. 67(1), pages 148-154, February.
    4. Artis, M J & Lewis, M K, 1984. "How Unstable Is the Demand for Money in the United Kingdom?," Economica, London School of Economics and Political Science, vol. 51(204), pages 473-476, November.
    5. Tavlas, George S., 1981. "Keynesian and monetarist theories of the monetary transmission process : Doctrinal aspects," Journal of Monetary Economics, Elsevier, vol. 7(3), pages 317-337.
    6. Laidler, David E W, 1976. "Inflation in Britain: A Monetarist Perspective," American Economic Review, American Economic Association, vol. 66(4), pages 485-500, September.
    7. Niehans, Jurg, 1982. "Innovation in monetary policy : Challenge and response," Journal of Banking & Finance, Elsevier, vol. 6(1), pages 9-28, March.
    8. Taylor, Alan M. & Aikman, David & Bush, Oliver, 2016. "Monetary Versus Macroprudential Policies: Causal Impacts of Interest Rates and Credit Controls in the Era of the UK Radcliffe R," CEPR Discussion Papers 11353, C.E.P.R. Discussion Papers.
    9. Nelson, Edward, 2003. "The future of monetary aggregates in monetary policy analysis," Journal of Monetary Economics, Elsevier, vol. 50(5), pages 1029-1059, July.
    10. Edward Nelson, 2004. "Money and the Transmission Mechanism in the Optimizing IS-LM Specification," History of Political Economy, Duke University Press, vol. 36(5), pages 271-304, Supplemen.
    11. Brunner, Karl, 1975. "The Demand for and Supply of Inflation: Comment," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 837-857, December.
    12. Laidler, David, 1981. "Monetarism: An Interpretation and an Assessment," Economic Journal, Royal Economic Society, vol. 91(361), pages 1-28, March.
    13. Nelson Edward, 2005. "The Great Inflation of the Seventies: What Really Happened?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-50, July.
    14. Taradas Bandyopadhyay, 1976. "Some Remarks on the Role of Money in One Sector Neoclassical Growth Model," University of Western Ontario, Departmental Research Report Series 7610, University of Western Ontario, Department of Economics.
    15. Fetherston, Martin J. & Godley, Wynne A. H., 1978. ""New Cambridge" macroeconomics and global monetarism : Some issues in the conduct of U.K. economic policy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 9(1), pages 33-65, January.
    16. Robinson, Joan, 1970. "Quantity Theories Old and New," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 2(4), pages 504-512, November.
    17. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
    18. Brunner, Karl & Meltzer, Allan H., 1987. "Empirical studies of velocity, real exchange rates, unemployment, and productivity," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 27(1), pages 1-8, January.
    19. Parkin, Michael & Sumner, Michael & Ward, Robert, 1976. "The effects of excess demand, generalized expectations and wage-price controls on wage inflation in the UK: 1956-1971," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 2(1), pages 193-221, January.
    20. Glenn M. MacDonald, 1982. "The Size and Structure of Union-Nonunion Wage Differentials in Canadian Industry: Corroboration, Refinement and Extension," University of Western Ontario, Departmental Research Report Series 8218, University of Western Ontario, Department of Economics.
    21. Fratianni, Michele & von Hagen, Jürgen, 2001. "The Konstanz Seminar on Monetary Theory and Policy at Thirty," ZEI Working Papers B 02-2001, University of Bonn, ZEI - Center for European Integration Studies.
    22. Aikman, David & Bush, Oliver & Davis, Alan, 2016. "Monetary versus macroprudential policies causal impacts of interest rates and credit controls in the era of the UK Radcliffe Report," Bank of England working papers 610, Bank of England.
    23. Karl Brunner, 1973. "A Diagrammatic Exposition of the Money Supply Process," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 109(IV), pages 481-533, December.
    24. Karl Brunner & Allan H. Meltzer, 1963. "Predicting Velocity: Implications For Theory And Policy," Journal of Finance, American Finance Association, vol. 18(2), pages 319-354, May.
    25. Brunner, Karl & Meltzer, Allan H., 1984. "Essays on macroeconomic implications of financial and labor markets and political processes," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 21(1), pages 1-8, January.
    26. Brunner, Karl & Meltzer, Allan H., 1979. "Policies for employment, prices, and exchange rates," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 11(1), pages 1-7, January.
    27. David Laidler, 2004. "From Bimetallism to Monetarism: The Shifting Political Affiliation of the Quantity Theory," Chapters, in: Ingo Barens & Volker Caspari & Bertram Schefold (ed.), Political Events and Economic Ideas, chapter 1, Edward Elgar Publishing.
    28. Howard, David H., 1982. "The British banking system's demand for cash reserves," Journal of Monetary Economics, Elsevier, vol. 9(1), pages 21-41.
    29. Peter N. Ireland, 2017. "Allan Meltzer’s Model of the Transmission Mechanism and Its Implications for Today," Boston College Working Papers in Economics 938, Boston College Department of Economics.
    30. Wieladek, Tomasz & Haldane, Andrew & Roberts-Sklar, Matt & Young, Chris, 2016. "QE: the story so far," CEPR Discussion Papers 11691, C.E.P.R. Discussion Papers.
    31. Parkin, Michael, 1984. "The United Kingdom: Political economy and macroeconomics : A comment on the Walters paper," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 21(1), pages 281-293, January.
    32. McCallum, Bennett T., 1994. "Identification of inflation-unemployment tradeoffs in the 1970s a comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 41(1), pages 231-241, December.
    33. Nelson, Edward & Nikolov, Kalin, 2004. "Monetary Policy and Stagflation in the UK," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(3), pages 293-318, June.
    34. Rowan, D C, 1973. "The Monetary System in the Fifties and Sixties," The Manchester School of Economic & Social Studies, University of Manchester, vol. 41(1), pages 19-42, March.
    35. Darby, Michael R. & Lothian, James R., 1983. "British economic policy under margaret thatcher: A midterm examination," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 18(1), pages 157-207, January.
    36. Walters, Alan A., 1984. "The United Kingdom: Political economy and macroeconomics," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 21(1), pages 259-280, January.
    37. Hall, Robert E., 1978. "A comment on the Fetherston and Godley and Posner papers," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 9(1), pages 87-89, January.
    38. Hodgman, Donald R, 1971. "British Techniques of Monetary Policy: A Critical Review," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 3(4), pages 760-779, November.
    39. Brunner, Karl & Meltzer, Allan H., 1980. "Monetary institutions and the policy process," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 13(1), pages 1-8, January.
    40. Karl Brunner & Allan H. Meltzer, 1968. "Liquidity Traps for Money, Bank Credit, and Interest Rates," Journal of Political Economy, University of Chicago Press, vol. 76(1), pages 1-1.
    41. Paul Temperton, 1991. "UK Monetary Policy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-11836-6.
    42. Brunner, Karl & Meltzer, Allan H, 1971. "The Uses of Money: Money in the Theory of an Exchange Economy," American Economic Review, American Economic Association, vol. 61(5), pages 784-805, December.
    43. Jonson, Peter D., 1977. "Inflation and growth in the United Kingdom : A longer-run perspective," Journal of Monetary Economics, Elsevier, vol. 3(1), pages 1-23, January.
    44. Nelson, Edward, 2001. "What Does the UK's Monetary Policy and Inflation Experience Tell Us About the Transmission Mechanism?," CEPR Discussion Papers 3047, C.E.P.R. Discussion Papers.
    45. Brunner, Karl, 1969. "The Policy Discussions by Stein and Worswick: A Comment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(3), pages 496-502, August.
    46. Laidler, David E W, 1991. "Karl Brunner's Monetary Economics--An Appreciation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(4), pages 633-658, November.
    47. Paul Mizen (ed.), 2003. "Monetary History, Exchange Rates and Financial Markets," Books, Edward Elgar Publishing, number 2818.
    48. Allan H. Meltzer, 2001. "The Transmission Process," Palgrave Macmillan Books, in: Deutsche Bundesbank (ed.), The Monetary Transmission Process, chapter 3, pages 112-130, Palgrave Macmillan.
    49. den Butter, F. A. G. & Fase, M. M. G., 1981. "The demand for money in EEC countries," Journal of Monetary Economics, Elsevier, vol. 8(2), pages 201-230.
    50. Summer, M. T., 1980. "The operation of monetary targets," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 13(1), pages 91-130, January.
    51. Brunner, Karl & Meltzer, Allan H., 1978. "Public policies in open economies," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 9(1), pages 1-4, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Edward Nelson, 2019. "The Monetary Base in Allan Meltzer's Analytical Framework," Finance and Economics Discussion Series 2019-001, Board of Governors of the Federal Reserve System (U.S.).
    2. Edward Nelson, 2004. "Money and the Transmission Mechanism in the Optimizing IS-LM Specification," History of Political Economy, Duke University Press, vol. 36(5), pages 271-304, Supplemen.
    3. Nelson, Edward, 2017. "Reaffirming the Influence of Milton Friedman on U.K. Economic Policy," Working Papers 2017-01, University of Sydney, School of Economics, revised Feb 2017.
    4. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    5. Rudiger Dornbusch & Stanley Fischer, 1979. "Sterling and the External Balance," NBER Working Papers 0327, National Bureau of Economic Research, Inc.
    6. David Laidler, 1991. "The Quantity Theory is Always and Everywhere Controversial—Why?," The Economic Record, The Economic Society of Australia, vol. 67(4), pages 289-306, December.
    7. Peter N. Ireland, 2017. "Allan Meltzer’s Model of the Transmission Mechanism and Its Implications for Today," Boston College Working Papers in Economics 938, Boston College Department of Economics.
    8. Nelson, Edward, 2003. "The future of monetary aggregates in monetary policy analysis," Journal of Monetary Economics, Elsevier, vol. 50(5), pages 1029-1059, July.
    9. Edward Nelson, 2009. "An Overhaul of Doctrine: The Underpinning of UK Inflation Targeting," Economic Journal, Royal Economic Society, vol. 119(538), pages 333-368, June.
    10. Michael Bordo & Anna J. Schwartz, 2010. "David Laidler on Monetarism," Palgrave Macmillan Books, in: Robert Leeson (ed.), David Laidler’s Contributions to Economics, chapter 3, pages 44-59, Palgrave Macmillan.
    11. Nelson Edward, 2005. "The Great Inflation of the Seventies: What Really Happened?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-50, July.
    12. Brian Snowdon, 2007. "The New Classical Counter-Revolution: False Path or Illuminating Complement?," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 541-562, Fall.
    13. Chen, Zhengyang & Valcarcel, Victor J., 2021. "Monetary transmission in money markets: The not-so-elusive missing piece of the puzzle," Journal of Economic Dynamics and Control, Elsevier, vol. 131(C).
    14. Nelson, Edward, 2008. "Ireland and Switzerland: The jagged edges of the Great Inflation," European Economic Review, Elsevier, vol. 52(4), pages 700-732, May.
    15. Duca, John V. & VanHoose, David D., 2004. "Recent developments in understanding the demand for money," Journal of Economics and Business, Elsevier, vol. 56(4), pages 247-272.
    16. Hafer, R.W. & Jones, Garett, 2008. "Dynamic IS curves with and without money: An international comparison," Journal of International Money and Finance, Elsevier, vol. 27(4), pages 609-616, June.
    17. David Laidler, 2013. "Mark Blaug on the quantity theory: a skirmish on the border between science and ideology in the history of economic thought," Chapters, in: Marcel Boumans & Matthias Klaes (ed.), Mark Blaug: Rebel with Many Causes, chapter 7, pages 63-77, Edward Elgar Publishing.
    18. Chevapatrakul, Thanaset & Kim, Tae-Hwan & Mizen, Paul, 2012. "Monetary information and monetary policy decisions: Evidence from the euroarea and the UK," Journal of Macroeconomics, Elsevier, vol. 34(2), pages 326-341.
    19. Edward Nelson, 2022. "How Did It Happen?: The Great Inflation of the 1970s and Lessons for Today," Finance and Economics Discussion Series 2022-037, Board of Governors of the Federal Reserve System (U.S.).
    20. Jürgen von Hagen, 2004. "Hat die Geldmenge ausgedient?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 5(4), pages 423-453, November.

    More about this item

    Keywords

    Karl Brunner; U.K. monetary policy; Monetarism; Monetary base control; Transmission mechanism;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2019-04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.