The Causality Debate

  • Richard Coghlan


In recent years the monetarist approach to macroeconomic analysis has gained increasing acceptance as a framework for interpreting economic behaviour, and has consequently become more important in discussing the policy options facing the authorities. Monetary variables have come to play an increasing role in the large scale macroeconomic models, particularly in the United States; for a comprehensive survey, see Fisher and Sheppard (1972). The monetarists have, however, tended to concentrate on simpler, highly aggregative, reduced-form models in their attempt to demonstrate the overwhelming influence of money on the economy, in particular on prices and the rate of inflation. Strangely, this work has received scant attention in macro and monetary textbooks, and yet it would seem essential to a proper understanding of the monetarist position. This chapter therefore briefly summarises the debate, and the evidence that has been presented.


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© Richard Coghlan 1980

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  • Richard Coghlan

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