Monetarism

View that money growth drives inflation and cycles, opposing fiscal fine-tuning with money rules.

Specifications & Metrics

era

1956 onward

founders

Milton Friedman, Anna Schwartz

signature

Inflation as a monetary phenomenon (A Monetary History, 1963)

Core Principles & Analysis

• Friedman's 1956 restatement of the quantity theory recentered analysis on money demand.
• A Monetary History of the United States (1963) blamed the Great Depression's depth on the Fed's passive contraction.
• Volcker's 1979-82 disinflation ran on monetarist premises before velocity instability ended money targeting.

Sources

• Econlib Concise Encyclopedia of Economics: Monetarism