Lesson12 - Lesson12:MonetaryTheoryandPolicy In this lesson...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Lesson 12: Monetary Theory and Policy In this lesson we will develop a framework for understanding and evaluating monetary policy. We will place this in the context of the history of economic thought. We will learn about the Classical economists, Keynesian economics, Monetarism and other approaches. Suggested Reading: RSU Chapter 23, 24 27 – 30. You might also find the following paper of mine helpful – Inflation, Common Fallacies and Real Issues,” Graduate School of Busines University of the Witwatersrand Fact and Opinion Papers , No. 3, (Second Edition, 1978). (You may download it from http://www.utdallas.edu/~plewin/F&Opaper.pdf ) What Remains of Monetarism? R. W. Hafer Economic Review , Federal Reserve Bank of Atlanta Vol. 86, No. 4, Fourth Quarter 2001 (available at: http://www.frbatlanta.org/filelegacydocs/hafer.pdf)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Schools of Economic Thought The Classical Economists (The Quantity Theory Tradition) Pre-Smith Karl Marx Alfred Marshall – Cambridge school Irving Fisher - America Keynes The Austrian School (1871) Karl Menger Böhm-Bawerk; Wieser Mises Hayek Modern Austrians Kirzner, Lachmann Boettke, Horwitz, Roger Garrison, Lewin The Neoclassical Revolution (1871) The Keynesian Revolution Samuelson, Solow, Tobin The Chicago School (approx. 1952 – 1990) Monetarism Milton Friedman
Background image of page 2
Classical Economics and the Role of Money The ascendancy of laissez faire ideas Say’s Law and the monetary dichotomy Links in the chain Fed M the Economy M GDP; define Q = GDP/P, where P is the (current weight) GDP deflator. M PQ. MV = PQ – the equation of exchange –Fisher; M = kPQ – the Cambridge cash balance equation – Marshall.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/23/2011 for the course FIN 6320 taught by Professor Lewin during the Summer '11 term at University of Texas at Dallas, Richardson.

Page1 / 16

Lesson12 - Lesson12:MonetaryTheoryandPolicy In this lesson...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online