Advertisement

A Keynsian Model for a Post-monetarist Open Economy

Chapter
  • 21 Downloads

Abstract

I shall take as my theme the shape of economic policy in the post-monetarist era. It is not too optimistic to say that we live in a post-monetarist era. Deflationary policies for structural adjustment will no doubt continue to find favour with IMF and some OECD countries. But deflation as a cure for all ills is not new. It was favoured at all times by central bankers and urged against popular economic policies. Monetarism, though a species of deflation, is different. Monetarism put forward the idea that it was the control of money supply, assumed to be a definable, measurable and controllable aggregate, that was to be the sole instrument for achieving a reduction in the rate of inflation. It was further asserted that this would happen without any marked reduction in output or employment. As long as rational expectations and market clearing existed, the economy had only to slide down the vertical Phillips curve (see Desai. 1981).

Keywords

Exchange Rate Interest Rate Monetary Policy Money Supply Nominal Interest Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Boskin, M. (1987) Reaean and the Economy (San Francisco, California: ICS Press).Google Scholar
  2. Buiter, W. and Miller, M. (1983) ‘Monetary policy and international competitiveness, ‘in Eltis, W. A. and Sinclair, P. J. N. (eds), The Money Supply and the Exchange Rate (Oxford: Oxford University Press).Google Scholar
  3. Cecco, M. de (1987) Changing Money (Oxford: Blackwell).Google Scholar
  4. Desai, M. (1977) Keynesian Theory of Investment: A Critique and a Reconstruction (London LSE) (unpublished).Google Scholar
  5. Desai, M. (1979) ‘Review of Mandel [1978]’, Economic Journal (June): 457–8.Google Scholar
  6. Desai, M. (1981) Testing Monetarism (London: Frances Pinter).Google Scholar
  7. Desai, M. (1983) ‘Monetary theory and monetary policy in the General Theory’, published in Spanish in Informacion Commercial Espanola, Keynes Centenary Number.Google Scholar
  8. Desai, M. (1984) ‘Wages and prices: a quarter century after the Phillips curve’ in Hundry, D. and Wallis, K. (eds.) Econometrics and Quantitative Economics (Oxford: Blackwell)Google Scholar
  9. Desai, M. (1986) ‘Is monetarism dead?’ (de Roos Lecture, Free University of Amsterdam), (published by Nederlands Instituut voor het Bank-en-Effecter Bedyif).Google Scholar
  10. Desai, M. (1989) ‘The scourge of the monetarists: Kaldor on monetarism and money’. Cambridge Journal of Economics (March).Google Scholar
  11. Desai, M. and Weber, G. (1986) ‘Money inflation and unemployment’, LSE DEMEIC Discussion Paper No. A59.Google Scholar
  12. Desai, M. and Weber, G. (1988) ‘A Keynesian macroeconometric model of the UK 1955–1984’ Journal of Applied Econometrics (February).Google Scholar
  13. Dombusch, R. (1976) ‘Expectations and exchange rate dynamics’, Journal of Political Economy (December).Google Scholar
  14. Edison, H. (1987) ‘Purchasing power parity in the long run: a test of the dollar pound 1890–1987’, Journal of Money Credit and Banking (April).Google Scholar
  15. Frenkel, J. and Johnson, H. G. (1976) The Monetary Approach to the Balance of Payments (London: Allen & Unwin).Google Scholar
  16. Gillman, M. (1981) The Financing of Foreign Direct Investment (London: Frances Pinter)Google Scholar
  17. Glyn, A. and Sutcliffe R. (1972) British Capitalism, Workers and the Profit Squeeze (Hartnondsworth: Penguin).Google Scholar
  18. Helpmann, E. and Krugman P. (1985) Market Structure and Foreign Trade (Cambridge Mass: MIT Press).Google Scholar
  19. Judd, J. and Scadding, J. L. (1982) ‘The search for a stable money demand function: a survey of the post-1973 literature’, Journal of Economic Literature (September).Google Scholar
  20. Lucas, R. and Sargent T. (eds) (1981) Rational Expectations and Econometric Practice (London: Georee Allen & Unwin).Google Scholar
  21. Mandel, E. (1978) The Second Slump: A Marxist Analysis of Recession in the Seventies (London: New Left Books).Google Scholar
  22. Matthews, K. and Minford, P. (1987) ‘Mrs Thatcher’s economic policies 1979–87’, Economic Policy (October)Google Scholar
  23. Nordhaus, W. (1974) ‘The falling share of profits’, Brookings Papers on Economic Activity, 1: 169–208.CrossRefGoogle Scholar
  24. Sargan, F.D. (1964) ‘Wages and Prices in the United Kingdom: a study in econometric methodology’, reprinted in Hundry, D. and Wallis, K. (eds) Econometrics and Quantitative Economics (Oxford: Blackwell, 1984)Google Scholar
  25. Sargent, T. (1979) Macroeconomic Theory (New York: Academic Press).Google Scholar
  26. UNIDO (1984) ‘Industry and development’, First Global Report (Vienna: UN)Google Scholar
  27. UNIDO (1985) ‘Industry and development’, Second Global Report (Vienna: UN).Google Scholar

Copyright information

© Helge Brink 1992

Authors and Affiliations

There are no affiliations available

Personalised recommendations