What is a Post Monetarist Economy: Difference between revisions
(Created page with "== Post Monetarism is an Absence of a Money Supply Target in an Endogenous Money System == Monetarism was a the dominant economic paradigm from 1971 to 2001, and the basic template for the US economic . I define monetarism as a fiat money system which tries to control the price level and/or balance economic activity by targeting the "money supply" directly. The quantity of money in circulation as it relates to the price level. I am defining post monetarism as a fiat m...") |
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== Post Monetarism is an Absence of a Money Supply Target in an Endogenous Money System == | == Post Monetarism is an Absence of a Money Supply Target in an Endogenous Money System == | ||
Monetarism was | Monetarism was the dominant economic paradigm from 1971 to 2001, | ||
and the basic template for the US economic . I define monetarism as | and the basic template for the US economic . I define monetarism as | ||
a fiat money system which tries to control the price level and/or | a fiat money system which tries to control the price level and/or | ||
Revision as of 21:31, 12 January 2024
Post Monetarism is an Absence of a Money Supply Target in an Endogenous Money System
Monetarism was the dominant economic paradigm from 1971 to 2001, and the basic template for the US economic . I define monetarism as a fiat money system which tries to control the price level and/or balance economic activity by targeting the "money supply" directly. The quantity of money in circulation as it relates to the price level.
I am defining post monetarism as a fiat money system, more specifically, and endogenous money system, that does not use a money supply target.
While Reagan's policies embraced a fiscally expansive economy, it was not until about 2001, in the wake of the 90's growth, dot com bubble, as well as geopolitical events like the attack on the world trade center, that monetarism was completely and explicitly abandoned as a guide to economic policy.
I would credit the end of monetarism as playing a significant role in the 2008 crash, not that monetarism was effective in preventing financial instability, only that we used a poor growth mechanism: real estate and general asset price growth, to drive economic expansion.
A strong entry level job market, whether that is achieved through public measures or private enterprise, leading to a thriving developing class is in my opinion, the most effective way to get consistent and sustainable growth. The housing bubble was the exact opposite of this, and it predictably collapsed. Trying to grow off of appreciation of exclusive asset classes, is a poor formula, and tends to undermine itself. By that I mean investments and assets for the ultra-wealthy.