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Monetary theory

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Title: Monetary theory  
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Monetary theory

Monetary economics is a branch of economics that historically prefigured and remains integrally linked to macroeconomics.[1] Monetary economics provides a framework for analyzing money in its functions as a medium of exchange, store of value, and unit of account. It considers how money, for example fiat currency, can gain acceptance purely because of its convenience as a public good.[2] It examines the effects of monetary systems, including regulation of money and associated financial institutions[3] and international aspects.[4]

Modern analysis has attempted to provide a micro-based formulation of the demand for money[5] and to distinguish valid nominal and real monetary relationships for micro or macro uses, including their influence on the aggregate demand for output.[6] Its methods include deriving and testing the implications of money as a substitute for other assets[7] and as based on explicit frictions.[8]

Research areas have included:

Current state of monetary economics

Since 1990, the classical form of monetarism has been questioned. This is because of events which many economists interpret as inexplicable in monetarist terms, especially 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 may be explained by a virtuous cycle of productivity and investment on one hand, and a certain degree of "irrational exuberance" in the investment sector.

See also


General references

  • Handbook of Monetary Economics, Elsevier.
_____, 1990. v. 2 links for previews.
Friedman, Benjamin, and abstract & TOC.
  • Boughton, James R., and Elmus R. Wicker, 1975. The Principles of Monetary Economics.
  • x.
  • Clower, Robert W., ed., 1969. Monetary Theory: Selected Readings, Harmondsworth, Penguin.
  • Eden, Benjamin, 2005. A Course in Monetary Economics: Sequential Trade, Money, and Uncertainty. Description.
  • Gale, Douglas, 1982. Money: in Equilibrium, Cambridge University Press, Cambridge Economic H andbooks, 349 pp. preview.
  • _____, 1983. Money: in Disequilibrium, Cambridge Economic Handbooks, 382 pp. preview.
  • chapter titles.
  • Grandmont, Jean-Michel, 1985. Money and Value: A Reconsideration of Classical and Neoclassical Monetary Economics, Econometric Society Monographs, v. 5, Cambridge University Press. preview .
  • Handa, Jagdish, 2007. Monetary Economics, 2nd ed. Routledge. preview.
  • Harris, Laurence, 1981. Monetary Theory. New York: McGraw-Hill.
  • links. Oxford.
  • The New Palgrave Dictionary of Finance and Money, 1992. 3 v. Description.
  • "monetary".
  • Rabin, Alan A., 2004. Monetary Theory MPG Books: London. Arrow-page-searchable chapter previews.
  • Walsh, Carl E., 2003. Monetary Theory and Policy, 2nd ed., MIT Press. chapter-preview links.

External links

  • Macroeconomics and Monetary Economics, including:
(JEL: E4) Money and Interest Rates
(JEL: E5) Monetary Policy, Central Banking, and the Supply of Money and Credit
Presentation of Money, credit and finance an slideshow
What is money? an slideshow
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