Which economist is closely associated with monetarism?

Which economist is closely associated with monetarism?

• A. Paul Samuelson
• B. John Maynard Keynes
• C. David Ricardo
• D. Milton Friedman

Answer: (D)

Monetarism focuses on how the money supply drives inflation and economic stability. Milton Friedman is the economist most closely associated with these ideas. He argued that it is changes in the money supply that largely determine price levels over time, and that policy should aim for steady, predictable growth in the money supply rather than relying on active fiscal stimulus to manage the economy. This leads to the view that inflation is largely a monetary phenomenon: if the money supply grows faster than real output, prices rise. Friedman popularized the idea that monetary policy should be rule-based and less prone to manipulation, such as advocating a fixed growth rate for the money supply (the idea behind a steady k-percent rule). He also stressed that money is not a tool to permanently reduce unemployment in the long run, since, in the long run, real output is determined by real factors rather than the money supply. Other economists contributed important macroeconomic theories in different traditions, but monetarism centers on money supply rules and inflation dynamics, with Friedman as the leading figure.

Monetarism focuses on how the money supply drives inflation and economic stability. Milton Friedman is the economist most closely associated with these ideas. He argued that it is changes in the money supply that largely determine price levels over time, and that policy should aim for steady, predictable growth in the money supply rather than relying on active fiscal stimulus to manage the economy. This leads to the view that inflation is largely a monetary phenomenon: if the money supply grows faster than real output, prices rise.

Friedman popularized the idea that monetary policy should be rule-based and less prone to manipulation, such as advocating a fixed growth rate for the money supply (the idea behind a steady k-percent rule). He also stressed that money is not a tool to permanently reduce unemployment in the long run, since, in the long run, real output is determined by real factors rather than the money supply.

Other economists contributed important macroeconomic theories in different traditions, but monetarism centers on money supply rules and inflation dynamics, with Friedman as the leading figure.