Does Monetarism Fit The UK Facts? A Comment

Abstract

An immediate problem is to decide exactly what is meant by monetarism in the present UK context. Casual empiricism suggests that there are fewer people now who would wish to be described as monetarists than there were two years ago. Economic events under the present government have certainly contributed to this reluctance to be so described, even though there is substantial debate as to (a) how far the policies of the government have contributed to recent events and (b) whether these policies can in fact be described as monetarist. Rose (1981), for example, argues that there has only been a moderate degree of monetary restriction and therefore the allegation that ‘monetarism’ bears the main responsibility for high unemployment is not supported. Niehans (1981), on the other hand, takes the view that ‘the last two years, and particularly the last eighteen months, were a period of abrupt and pronounced monetary restraint’.