monetarism


monetarism

noun Economics.

  1. a doctrine holding that changes in the money supply determine the direction of a nation’s economy.

noun

  1. the theory that inflation is caused by an excess quantity of money in an economy
  2. an economic policy based on this theory and on a belief in the efficiency of free market forces, that gives priority to achieving price stability by monetary control, balanced budgets, etc, and maintains that unemployment results from excessive real wage rates and cannot be controlled by Keynesian demand management

The economic doctrine that the supply of money has a major impact on a nation’s economic growth. For example, monetarists prefer to control inflation by restricting the growth of a nation’s money supply rather than by raising taxes. The doctrine is associated with Milton Friedman.

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