Abstract
Searching for factors which determine the proportion of output change in nominal income change, and the proportion of price change in nominal income change, has been regarded as one of the unresolved questions in macro-economics. (See Nobay and Johnson 1977; Gordon 2009, ch 7.) In the papers which were intended to describe monetary theory in the monetarist tradition, M. Friedman (1970, 1971) and Gordon (1974) presented frameworks for monetary analysis which describe the quantity theory and the income-expenditure theory. The two frameworks differ in the last equation, which solves the variables of the systems determinately. The difference between the two frameworks described by Friedman was that one made output (national income) fixed for quantity theory, while the other made the price level fixed for income-expenditure theory.
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© 2013 Masanori Amano
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Amano, M. (2013). The ‘Missing Equations’ for Postwar USA, UK, and Japan. In: Money, Capital Formation and Economic Growth. Palgrave Macmillan, London. https://doi.org/10.1057/9781137281838_1
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DOI: https://doi.org/10.1057/9781137281838_1
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