Monetarism: The Issues and the Outcome

Atlantic Economic Journal, Volume 26, Number 1 (March 1998)

Posted: 24 Feb 1998

See all articles by Allan H. Meltzer

Allan H. Meltzer

Carnegie Mellon University - David A. Tepper School of Business

Abstract

The paper surveys some main issues in the monetarist-Keynesian debate of the 1960s and 1970s, and the outcome of the debate. The debate was not static; the issues changed. At first Keynesians argued that money was largely irrelevant for output and the price level. By the end of the 1970s, issues such as neutrality, the natural rate, and the effect of inflation on nominal interest rates had been settled. Principal remaining issues were the use of money growth as a target, instrument, or indicator of monetary policy and reliance on rules. The paper sketches some of the progress on rules versus discretion in the past twenty years but focuses most on the role of money. Some evidence is presented for the United States supporting the monetarist position that control of money is useful in a medium-term or rule-based policy to control inflation as now advocated by several central banks.

JEL Classification: E41, E47, E51, E58

Suggested Citation

Meltzer, Allan H., Monetarism: The Issues and the Outcome. Atlantic Economic Journal, Volume 26, Number 1 (March 1998), Available at SSRN: https://ssrn.com/abstract=56071

Allan H. Meltzer (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

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