"I would define the stock of money as including currency outside commercial banks plus all deposits of commercial banks. I would specify that the Reserve System shall see to it that the total stock of money so defined rises month by month, and indeed, so far as possible, day by day, at an annual rate of X per cent, where X is some number between 3 and 5. The precise definition of money adopted, or the precise rate of growth chosen, makes far less difference than the definite choice of a particular definition and a particular rate of growth."
Monetarism is an economically right ideology, whose general economic theory was created by Milton Friedman to cure inflation. He believes that the government's primary role in the economy should be monetary policy with the goal of keeping inflation under control. Specifically, he thinks that there should be a very low inflation rate (1%-3%), and he wants this to be as stable as possible, since it being stable eliminates the market distortion both non-stable inflation/deflation brings. In modern times, several Monetary Authorities, notably Former Federal Reserve Chair and Nobel Prize winner Ben Bernanke, have been monetarists. Monetarist policies were used by Bernanke during the 2008 Great Recession with expansion of QE (Quantitative Easing) and the overall expansion of Money Supply.
The Federal Reserve Under Ben Bernanke (2006-2014)
Ben Bernanke was elected by President George H.W Bush along with the U.S Senate as Federal Reserve Chair on February 1st of 2006, succeeding the acclaimed Chair Alan Greenspan. Bernanke himself was considered an Orthodox Monetarist, and his skill was soon put to the test two years after his appointment during the 2008 Housing Crisis. The Federal Reserve ramped up Money Printing, as well as QE, in an attempt to stabilize the economy and ease off the pain caused by MBS. While most economists call the Federal Reserve's efforts a success, a few others, such as the staunch anti-fiat-currency Representative Ron Paul, criticized the Fed and Bernanke for the ensuing stagflation of 2012.
While controversial in extremely libertarian or leftist circles, most consider the chairmanship of Ben Bernanke to have had a positive effect. He was succeeded by Janet Yellen, one of his deputies, in early January of 2014.
Monetarism is an approach to Macroeconomics which stresses a large focus upon Monetary Policy instead of Fiscal Policy, in contrast to Keynesian School. Monetarism prefers Monetary Policy over Fiscal due to its belief that Monetary Policy is significantly easier to change than Fiscal Policy, and can have a far greater effect on the most important issue (to him) which is inflation. While Monetarism is quite different from Keynesianism, they both hold the axiomatic beliefs of Central Banking, Fiat Currency and so forth, and are usually combined in some form.
Personality and Behaviour
Monetarism is a specter of ancient theory (circa 1950) that occasionally is summoned by nations being plagued by high inflation and prices. After possessing a local central banker, he will destroy printers as penance to Milton Friedman, hoping that he will come back to life in full glory and usher in a new era of economic. He shall continue to offer up printers, non believers, and monetary workers until his messiah returns. Since this has yet to happen, all he usually has to show is better economic policy. After a few years, he is eventually exorcised from his host once they order a new printer.
How to Draw
- Draw a ball,
- Draw a red stripe through the middle vertical third of the ball,
- Draw blue lines on both edges of the red stripe,
- Draw the eyes and you're finished!
|217, 2, 0
|65, 100, 148
- Chicago School - My dad who neglects me at times.
- Fiscal Conservatism - We agree that economic policies must be fiscally responsible and long-term sustainable.
- Classical Conservatism - Enoch Powell is a great pal.
- Classical Liberalism - And you're even better.
- Ordo-Liberalism - German version of above who also likes more central banks.
- New Keynesianism - Keynesian School but better!
- Reformism - I'm with you buddy!
- Hayekism - Free Banking doesn't prevent inflation.
- Keynesian School - He believes the government should focus on government spending in times of crisis, I think the government should focus on money supply. Overall we still agree on central banking and the like, so we respect each other.
- Mugabeism - GET AWAY FROM THAT PRINTER.
- Chavismo - YOU TOO!
- Juche - Stop printing counterfeit money reeeeeee!
- Austrian School - Is gold money? No. No it is not.
- Jacksonian Democracy - Stop vetoing the central bank and causing economic panics!
- Major Works of Clark Warburton
- A Monetary History of the United States by Milton Friedman and Anna Schwartz
- A Program For Monetary Stability by Milton Friedman
- Clark Warburton
- Quantity theory of money
- Monetary disequilibrium theory
- Friedman's k-percent rule