Not All NGDP is Created Equal: A Critique of Market Monetarism

Journal of Private Enterprise 29(1) 2013: 41-52

13 Pages Posted: 14 Dec 2012 Last revised: 16 Aug 2014

Alexander William Salter

Texas Tech University - Rawls College of Business

Date Written: December 13, 2012

Abstract

Market Monetarism, with its policy rule of NGDP targeting, has in common with free banking that both seek to avoid monetary disequilibrium. One might conclude that these are different approaches to achieving the same end. The purpose of this paper is to show that the proximate ends are in fact conceived differently: Stable NGDP as an object of choice by a central bank is different from NGDP as the emergent outcome of the market process. Furthermore, well-known insights on knowledge, the pricing process, and the institutional context of economic activity suggest that this difference has important implications.

Keywords: free banking, Market Monetarism, market process, monetary disequilibrium, monetary institutions, NGDP

JEL Classification: B53, E42, E50

Suggested Citation

Salter, Alexander William, Not All NGDP is Created Equal: A Critique of Market Monetarism (December 13, 2012). Journal of Private Enterprise 29(1) 2013: 41-52. Available at SSRN: https://ssrn.com/abstract=2189175

Alexander William Salter (Contact Author)

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States

HOME PAGE: http://awsalter.com

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