Rational Expectations: These Chicago School economists disagree with both Keynesians and monetarists
and scholars working within the monetary disequilibrium framework find themselves in agreement on the theoretical desirability of an NGDP target.
In general, Monetarists
have taken comfort in the Knightian view that the structure of capital, particularly the inter-temporal structure, can be safely ignored, and that theories in the Austrian tradition, which make use of such concepts as "roundaboutness" and "stages of production," are especially misguided.
In fact, let's leave the Monetarists
in the mix and talk about the shortcomings in all three positions.
The primary objective of this paper is quantitative determination of the causal relationships among key instruments of the Czech National Bank's monetary policy, the intermediate criteria of monetary policy, and macroeconomic variables representing real economic performance of the Czech Republic and the domestic price level within monetarist
Until the 2008 crisis, the Keynesians and monetarists
were unconcerned about asset bubbles.
The underlying axiom of monetarist
theory (Friedman, 1986) is that every crisis is triggered by disturbances in the regularity of money supply.
McDermott, Glasgow THE modern-day monetarists
the Con-Dems say there is no alternative to the economic policies they are pursuing.
, Mundell (1963) assumes perfect capital mobility, i.
Although the authors do not say it this way, the fundamental difference between the New Keynesian literature and the New Monetarist
literature they describe is that the New Keynesians write for the policymaker who needs answers today and the New Monetarists
include almost everyone doing basic research on monetary theory.
Some points of separation between the monetarist
and the Keynesians can be summarized as follows: The monetarists
reject the strategic role of interest rate in the transmission mechanism which the Keynesians accept.
and Keynesians--especially the latter--come in many flavors.
, he says, were "too focused on aggregates like 'the' price level, which led economists to ignore the way inflation could distort individual prices at the microeconomic level, causing resource misallocation in the process.
Even as Keynesians and monetarists
have debated how to increase aggregate demand, supply-side economists and their political allies have been insisting that demand is typically not the problem.
Friedman (1983: 4) noted that while he favored a constant money growth rate, some monetarists
favored a different rule for monetary growth.