page
Managing Macroeconomic Variables 2
Neo Classical Through Keynesian 6
Keynesian Through Monetarism 10
Monetarism Through Supply Side 14
The Brief Supply Side Experiment 16
MONETARISM'S EFFECTIVENESS IN THE MANAGEMENT
This research examines the effectiveness of monetarism in the management of inflation and unemployment. Assessing the effectiveness of monetarism for the accomplishment of these tasks requires the consideration of alternative economic theories. The views of John Maynard Keynes, Milton Friedman, and other economic theorists are considered in the assessment of monetarism and alternative theoretical strategies for the control of inflation and unemployment.
The monetarist economic model is compared to the classical, neo classical, neo Keynesian, and supply side models within the context of the management of macroeconomic variables, of which inflation and unemployment are two of the most significant. Each of the models provides different emphases in the management of macroeconomic variables.
Raymond Rees differentiated between classical economics, and the classical school (Rees, 1990, p. 146). In the context of this differentiation, Rees stated on the one hand that the classical period of economics began with Adam Smith's Wealth of Nations in 1776 and ended with John Stuart Mill's Principles of Political Economy in 1848, while on the other hand including Alfred Marshall and Arthur Pigou in the classical school. Adam Smith was a contemporary and a friend of David Hume, and he traveled to France several times to meet with the leading thinkers of Physiocracy. Thus, while Adam Smith is considered to be the founder of classical economic theory, he nevertheless incorporated several important concepts into his theory from thinking not generally ascribed to the classical school. Hume's contention that the...