During the late-1940s and the early-1950s Milton Friedman favored a rule under which fiscal policy would be used to generate changes in the money supply with the aim of stabilizing output at full employment. He believed that the economy is inherently unstable because of endogenous movements in...

Translation of old economic doctrines into new technical frameworks led the profession to lose a valid theory of monetary non-neutrality. The theory relates to how additional money diffuses through the economy after entering at different points. Diffusion takes time, redistributes resources, and...

Robert W. Clower's article "A Reconsideration of the Microfoundations of Monetary Theory" (1967) deeply influenced the course of modern monetary economics. On the one hand, it revealed the deadlocks of Don Patinkin's project to integrate monetary and Walrasian value theory. On the other hand, it...

This paper examines the relationship of the monetary economics of James Tobin to modern monetary theory, which has diverged in many ways from the directions taken by Tobin and his associates (for example, moving away from multi‐asset models of financial market equilibrium and from monetary...