Chapter Seventeen: Module Intro -- Monetarism
Until now, this book has focused almost exclusively on Keynesian economic theory. But challenges to this theory exist. Monetarism is an economic school of thought rooted in the classical economic theory. Milton Friedman, the leader of the Monetarist philosophy, attracted a large number of followers during the 1970s when inflation in the United States was high, and economists and policy advisors were looking for ways to reduce that inflation. Since the mid-1980s, Monetarism has somewhat fallen out of favor among economists. Some of its theoretical propositions, however, have been incorporated into Keynesian economics. Therefore, it is interesting and useful to study this theory.
We recommend that you read the lecture notes first, then take the on-line quiz. Finally, review the module summary to solidify your understanding of the material.
Last update: January 2004