Monetarism II: Monetarism, Keynes and the ‘Keynesians’
Though the real challenge to Keynes lay in the ‘invisible’ elements of Friedman’s counter-revolution, the subsequent monetarist-Keynesian’ debate has been conducted entirely in terms of the ‘visible’ elements, which are alternative formulations of empirical relationships that have their counterpart in the ‘Keynesian’ model.
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Notes and References
- 5.M. Friedman, The Counter Revolution in Monetary Theory (London: IEA, 1970) p. 24.Google Scholar
- 6.‘Since we regarded prices as flexible, though not “perfectly” flexible, it was natural for us to interpret the transmission mechanism in terms of relative price adjustments over a broad area rather than in terms of narrowly defined interest rates’. M. Friedman, A Theoretical Framework for Monetary Analysis, Occasional Paper 112 (New York: NBER, 1971) pp. 27–9.Google Scholar
- 15.A Friedman, ‘Comments on The Critics’, p. 944. The reference is to J. M. Keynes, A Tract on Monetary Reform (London: Macmillan, 1923) p. 51.Google Scholar
- 22.N. Kaldor, The Scourge of Monetarism (Oxford: Oxford University Press, 1982). See the penetrating review by R. L. Harrington: ‘Monetar-isms’: Real and Imaginary — A Review Article’, Manchester School (March 1983) pp. 63–71.Google Scholar