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Recent experience does not include a "monetarist experiment," as some have argued, but may slightly reinforce preexisting reasons for doubting that the best way of formulating monetarist policy prescriptions is in the form of a constant growth rule for the money stock.A more desirable rule would...
Persistent link: https://www.econbiz.de/10012477819
Sargent and Wallace (S-W) show that, even when inflation is prima facie a strictly monetary phenomenon -- prices are flexible, markets clear and velocity is constant -- inflation is, in the long run, a fiscal phenomenon. This follows from the government budget constraint and the existence of an...
Persistent link: https://www.econbiz.de/10012478244
implications for monetary policy; and "super crowding out." Many considerations suggest that monetarism as theory and policy might … theory; the roles of stock .and flow variables and the stability of asset demand and expenditure functions; the relation …
Persistent link: https://www.econbiz.de/10012478331
leading proponents of monetarism, have not always been advocates of a constant money growth rate. It may nevertheless he … useful to relate one's thoughts about monetarism to Friedman's rule, as will be done in this paper. But the question that …
Persistent link: https://www.econbiz.de/10012478493
monetarism: Milton Friedman and the team of Karl Brunner and Allan Meltzer. Friedman did not explicitly state the reasons he …-LM to encompass both the quantity theory and the income-expenditure theory. Friedman attributed the failure of this effort …
Persistent link: https://www.econbiz.de/10012468985
The unpleasant monetarist arithmetic of Sargent and Wallace (1981) states that in a fiscally dominant regime tighter money now can cause higher inflation in the future. In spite of the qualifier 'unpleasant,' this result is positive in nature, and, therefore, void of normative content. I analyze...
Persistent link: https://www.econbiz.de/10012455814
-pricing theory, is calibrated to analyze the effects of monetary policy and financial innovation. We show that inflation can raise …
Persistent link: https://www.econbiz.de/10012459653
models, prices are sticky by assumption; here it is a result. We use search theory, with two consequences: prices are set in …
Persistent link: https://www.econbiz.de/10012461137
measures of arginal cost as the relevant determinant of inflation, as the theory suggests, instead of an ad-hoc output gap …
Persistent link: https://www.econbiz.de/10012471224
fully operational. A second relevant body of theory is that pertaining to currency crises. Formal models clarify various … recently- developed fiscal theory of price level determination, which if valid would have major implications for monetary …-fiscal arrangements in currency unions. This theory does not contend that fiscal behavior drives an accommodative monetary authority, but …
Persistent link: https://www.econbiz.de/10012471392