INTERMEDIATE

Monetarism

Popularized by Milton Friedman, monetarism is a school of economics that argues that changes in the money supply are the prime cause of economic instability. In the short run, changes in the money supply are said to be non-neutral. That is such changes affect production output in the short run but become neutral in the long run, causing, ceteris paribus, a rise in the general price level proportional to the increase of money. Monetarists advocate a slow, steady increase of the money supply in order to stabilize aggregate demand.

 

Related Freeman Articles

ARTICLE

The Greenspan Fed in Perspective

JUNE 01, 2006 by ROGER W. GARRISON

Some readers of the Wall Street Journal might have been led to believe that Alan Greenspan had somehow followed Milton Friedman's monetary rule. We now see, though, that there was no well-grounded rule; there was no standard.

ARTICLE

Vienna and Chicago: A Tale of Two Schools

It's a Shame the Schools See One Another's Philosophies as Competitive Rather Than Complementary

FEBRUARY 01, 1998 by MARK SKOUSEN

Since its inception, the Foundation for Economic Education has been associated with two free-market schools, the Austrian school of Ludwig von Mises and, to a lesser extent, the Chicago school of Milton Friedman. Mises, after leaving Vienna for New York City, was closely involved with Leonard Read, FEE's founder. He spoke frequently at FEE's headquarters in Irvington-on-Hudson, and wrote regularly for The Freeman.

Related Multimedia

MULTIMEDIA - VIDEO

Money and Inflation

JULY 16, 2013 by STEVEN HORWITZ

MULTIMEDIA - AUDIO

Money and Inflation - Lecture by Lawrence Reed

JULY 13, 2010

ONLINE EVENTS

FEE offers live online events for people new to the economic, ethical, and legal principles of a free society.

CURRENT ISSUE

July/August 2014

The United States' corporate tax burden is the highest in the world, but innovators will always find a way to duck away from Uncle Sam's reach. Doug Bandow explains how those with the means are renouncing their citizenship in increasing numbers, while J. Dayne Girard describes the innovative use of freeports to shield wealth from the myriad taxes and duties imposed on it as it moves around the world. Of course the politicians brand all of these people unpatriotic, hoping you won't think too hard about the difference between the usual crony-capitalist suspects and the global creative elite that have done so much to improve our lives. In a special tech section, Joseph Diedrich, Thomas Bogle, and Matthew McCaffrey look at various ways these innovators add value to our lives--even in ways they probably never expected.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION

img E-mail Subscription

VIEW PRIVACY POLICY