... conducive to the establishment of the economic process which took place in the early 2000's. 6.2. Monetarism and Milton Friedman Monetarism is an economic theory that says monetary policy is more effective than fiscal policy in regulating the economy. It emphasizes the role of the Federal Reserve and other central banks because they control the money supply. Monetarism today is mainly associated with the work ... of Milton Friedman, who was among the generation of economists to accept Keynesian economics and then criticize Keynes' theory of gluts using fiscal policy (government spending...

• Word Count: 2276
• Approx Pages: 9
• Has Bibliography
• Grade Level: High School

... monetarism theory is Keynesianism. Keynesians recognize the importance of both the money supply and wage rates in determining inflation. They sometimes advise using monetary and incomes policies as complimentary measures to reduce inflation, but most often rely on fiscal policy as the cure. Before we can understand the policies suggested by these different schools of thought, we must look at the historical development ... investment, or lowering taxes, raising consumption because people will have more money to spend, will both raise the level of aggregate demand. Both these policies com...

• Word Count: 1618
• Approx Pages: 6
• Grade Level: High School