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Keleher’s Market Monetarism

Keleher’s Market Monetarism

In the 1990s two Federal Reserve officials Robert E. Keleher and Manuel H. "Manley" Johnson came close to starting a Market Monetarist revolution. Johnson and Keleher pioneered what they termed a “Market Price Approach to Monetary Policy”. This approach is essentially Market Monetarism. I have in earlier posts highlighted their book on the subject from 1996, but they also wrote a number of papers during the 1990s that explained their approach.

Friedman on the Great Depression - the Youtube version

Friedman on the Great Depression - the Youtube version

Obviously anybody interested in monetary theory and monetary history should read Milton Friedman's and Anna Schwartz's great book "A Monetary History of the United States, 1867-1960", but you could also have a look at the youtube version of the story.

Recommend reading for aspiring Market Monetarists

Recommend reading for aspiring Market Monetarists

The Market Monetarist school has emerged in the blogosphere as a clear competitor to mainstream Keynesians as well as to the Austrian school thinking. However, Market Monetarists have really not been very clear about their intellectual heritage.

Sex, flowers and Friedman

Sex, flowers and Friedman

Milton Friedman quote of the day:

Bob Murphy is anti-market (monetarism)

Bob Murphy is anti-market (monetarism)

Bob Murphy has a comment on Market Monetarism on the Ludwig von Mises Institute website. Bob has been a fierce critic of Market Monetarism for some time and his views clearly deserves attention.

Friedman vs Mundell revisited

Friedman vs Mundell revisited

The euro crisis continues, but the issues are not new. Already back in 2001 two of the most influential monetary economists ever debated the euro issue – and the question of fixed versus floating exchange rates. Milton Friedman represented the euro sceptic view, while Robert Mundell represented the pro euro view.

Protectionism is still evil

Protectionism is still evil

In a recent comment on Chinese exchange rate policies Paul Krugman comes close to call for US protectionist policies against China.

Bill "the new Gipper" Woolsey's interesting idea

Bill "the new Gipper" Woolsey's interesting idea

Fellow Market Montarist Bill Woolsey has an interesting proposal. He suggests that the Federal Reserve should adopt a policy of targeting "growth rates of nominal GDP from Reagan's 1983 and 1984 recovery from the recession of 1982". Bill can hardly be said to be an inflationist as he is in fact is in favour of a long-term target of 3% yearly NGDP growth in the US (that would likely lead to 0-1% inflation over the longer run), but he nonetheless favours returning US NGDP to the pre-crisis trend through more aggressive easing in a transitory period.

If you want to know about the Great Recession read Robert Hetzel

If you want to know about the Great Recession read Robert Hetzel

For readers who are unfamiliar with Market Monetarism I have a number of pieces of research that I would recommend, but everybody should start out by reading Robert Hetzel’s excellent and truly thought provoking paper “Monetary Policy in the 2008--2009 Recession”

Sumner explains the difference between "old-style" monetarism and Market Monetarism:

Sumner explains the difference between "old-style" monetarism and Market Monetarism:

Scott Sumner in an answer to me on his blog explains the difference between "old-style" monetarism and Market Monetarism:

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