Chapter 28
Controversies in Macroeconomics 1: Monetarism and the Policy Ineffectiveness Proposition
This chapter reviews the controversies of recent decades over the possibility of an effective government policy to offset recessions and booms and so stabilize the economy at a high level of employment. Begin the chapter
Check your understanding: multiple-choice questions.
Overheads have not been prepared for this chapter.
You Need To Know
This chapter emerges directly from the discussions in Ch. 27 and draws on many points in the previous chapters. It will be quite difficult to follow without knowledge of the topics of chapters 15-18 and 20-25, plus
The Neoclassical Approach in Economics and
The Supply and Demand Approach in Microeconomics
Contents
- Introduction
- Monetarism
- Rules Rather Than Discretion
- Lags in Macroeconomic Policy
- Rational Expectations
- The Policy Ineffectiveness Proposition
- Permanence
- Problems with the Policy Ineffectiveness
Proposition
- Path Dependence
- A New Keynesian Interpretation
- Market Clearing
- Chapter Summary
Next Chapter: Controversies in Macroeconomics 2:
The Nature of Unemployment
To the list of chapters