INTERMEDIATE

Monetarism

Popularized by Milton Friedman, monetarism is a school of economics that argues that changes in the money supply are the prime cause of economic instability. In the short run, changes in the money supply are said to be non-neutral. That is such changes affect production output in the short run but become neutral in the long run, causing, ceteris paribus, a rise in the general price level proportional to the increase of money. Monetarists advocate a slow, steady increase of the money supply in order to stabilize aggregate demand.

 

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ARTICLE

The Greenspan Fed in Perspective

JUNE 01, 2006 by ROGER W. GARRISON

Some readers of the Wall Street Journal might have been led to believe that Alan Greenspan had somehow followed Milton Friedman's monetary rule. We now see, though, that there was no well-grounded rule; there was no standard.

ARTICLE

Vienna and Chicago: A Tale of Two Schools

It's a Shame the Schools See One Another's Philosophies as Competitive Rather Than Complementary

FEBRUARY 01, 1998 by MARK SKOUSEN

Since its inception, the Foundation for Economic Education has been associated with two free-market schools, the Austrian school of Ludwig von Mises and, to a lesser extent, the Chicago school of Milton Friedman. Mises, after leaving Vienna for New York City, was closely involved with Leonard Read, FEE's founder. He spoke frequently at FEE's headquarters in Irvington-on-Hudson, and wrote regularly for The Freeman.

Related Multimedia

MULTIMEDIA - VIDEO

Money and Inflation

JULY 16, 2013 by STEVEN HORWITZ

MULTIMEDIA - AUDIO

Money and Inflation - Lecture by Lawrence Reed

JULY 13, 2010

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November 2014

It's been 40 years since F. A. Hayek received his Nobel Prize. His insights, particularly on the distribution of knowledge and the impossibility of economic planning, remain hugely important today. In this issue, we look back on the influence of his work. Max Borders and Craig Biddle debate whether liberty must be defended from one absolute foundation, further reflections on Scottish secession, and how technology is already changing our world for the better--including how robots, despite the unease they cause, will only accelerate this process.
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