A Review of Monetarism

Tai-Yuen HON


Abstract. This paper is focused on a review of causality relationship between money, income, price and exchange rate. It reviews both the theoretical as well as empirical literature relevant to monetarism. The view insists on quantity theory of money, rational expectations, expectations and the neutrality of money, unanticipated money growth and unemployment, monetary policy game basic model, central bank behavior and credibility, sticky-price monetary model and vicious circle view of the international monetary system.

Keywords. Monetarism, Money, Income, Price, Exchange rates.

JEL. B20, B22.

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DOI: http://dx.doi.org/10.1453/jest.v2i4.552


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