Monetary economics
From Wikipedia, the free encyclopedia
Monetary economics is a major branch of macroeconomics.[1] It provides a framework for examining the relation between economic activity and money in its functions as a medium of exchange, store of value, and unit of account.[2] It considers the respective advantages of broad or narrow definitions of the money supply in explaining economic activity. It studies the effects of changes in the supply of or demand for money on interest rates, nominal and real output and the price level of an economy.[3]
[edit] Current state of monetary economics
Since 1990, the classical form of monetarism has been questioned because of events which many economists have interpreted as being inexplicable in monetarist terms, namely the unhinging of the money supply growth from inflation in the 1990s and the failure of pure monetary policy to stimulate the economy in the 2001-2003 period. Alan Greenspan, former chairman of the Federal Reserve, argued that the 1990s decoupling was explained by a virtuous cycle of productivity and investment on one hand, and a certain degree of "irrational exuberance" in the investment sector. Economist Robert Solow of MIT suggested that the 2001-2003 failure of the expected economic recovery should be attributed not to monetary policy failure but to the breakdown in productivity growth in crucial sectors of the economy, most particularly retail trade. He noted that five sectors produced all of the productivity gains of the 1990s, and that while the growth of retail and wholesale trade produced the smallest growth, they were by far the largest sectors of the economy experiencing net increase of productivity. "2% may be peanuts, but being the single largest sector of the economy, that's an awful lot of peanuts."
[edit] See also
- Inflation
- Real versus nominal in economics
- Classical dichotomy
- Neutrality of money
- Money illusion
- Equation of exchange
- Quantity theory of money
- Income velocity of money
- Liquidity preference
- Monetarism
- Monetary Disequilibrium Theory
- Monetary policy
[edit] Notes
- ^ JEL classification codes#Macroeconomics and monetary economics JEL: E Subcategories.
- ^ James Tobin (1992). “money” (Functions of Money), The New Palgrave Dictionary of Finance and Money, v. 2, pp. 771-74.
- ^ Alan A. Rabin (2004). Monetary Theory MPG Books: London, pp. 1, 8-12.
[edit] References
- William A. Barnett (2008). "monetary aggregation," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- Michael D Bordo (2008). "monetary policy, history of." The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- James R. Boughton and Elmus R. Wicker (1975). The Principles of Monetary Economics.
- Charles W. Calomiris (2008). "banking crises," The New Palgrave Dictionary of Economics,, 2nd Edition. Abstract.
- R.W. Clower, ed. (1969). Monetary Theory: Selected Readings, Harmondsworth, Penguin.
- Robert W. Dimand (2008). "monetary economics, history of," The New Palgrave Dictionary of Economics, 2nd Edition.Abstract.
- Benjamin Eden (2005). A Course in Monetary Economics: Sequential Trade, Money, and Uncertainty. Description.
- Christopher J. Erceg (2008). "monetary business cycle models (sticky prices and wages)," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- Benjamin M. Friedman (2008). "money supply," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- Benjamin M. Friedman and F.H. Hahn, ed. (1990). Handbook of Monetary Economics, v. 1, 2 . Elsevier. Description links for v. 1 and v. 2.
- Milton Friedman (1987, 2008). "quantity theory of money." The New Palgrave Dictionary of Economics. 2nd Edition. Abstract.
- Wynne Godley and Marc Lavoie (2007). Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. Palgrave MacMillan. Description.
- Jagdish Handa (2007). Monetary Economics, 2nd ed. Routledge. Description with linked chapter previews.
- Galbraith, John Kenneth (2001). Money: Whence it Came, Where it Went. Houghton Mifflin. ISBN 0735100705. Popular history of monetary institutions.
- Laurence Harris, Monetary Theory. New York: McGraw-Hill (1981).
- Christian Hellwig (2008). "monetary business cycles (imperfect information)," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- Peter N. Ireland (2008), "monetary transmission mechanism," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- Bennett T. McCallum (1989). Monetary Economics: Theory and Policy. Macmillan.
- _____ (1996). International Monetary Economics. Oxford. Description.
- Don Patinkin (1965, 2nd ed.). Money, Interest and Prices: An Integration of Monetary and Value Theory. New York: Harper and Row.
- Lawrence H. Officer (2008). Topical Insight: Bailouts, The New Palgrave Dictionary of Economics Online "Empirical evidence" section on bank bailouts.
- Alan A. Rabin (2004). Monetary Theory. MPG Books: London
- Christina D. Romer and David H. Romer (2007). "Monetary Economics," NBER Reporter, 2007:2.
- Joseph Stiglitz and Bruce Greenwald (2003). Towards a New Paradigm in Monetary Economics. Cambridge. Description.
- James Tobin (1992). “money,” The New Palgrave Dictionary of Finance and Money, v. 2, pp. 770-79.*
- Walsh, Carl E. (2003). Monetary Theory and Policy, 2nd ed.. MIT Press. ISBN 0262232316. Standard graduate-level textbook. Linked chapter previews.
[edit] External links
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