Charles A E. Goodhart: The continuing muddles of monetary theory: A steadfast refusal to face facts

Quotable essay from ...

The continuing muddles of monetary theory: A steadfast refusal to face facts

19 pp.
3.49 EUR
(October 2009)

For a payment by direct debit or credit card no PayPal account is required! In case of problems please contact us.

I agree with the terms and conditions, especially § 8 (only private use, no transmission to third party) and accept that my order cannot be revoked.

download size: approx. 143 kb

“The continuing muddles of monetary theory: A steadfast refusal to face facts” are addressed by Charles A.E. Goodhart. He holds that there has been a remarkable gulf between mainstream monetary theory and reality in recent decades. Amongst the worst examples are: (1) the IS/LM-model, assuming that the monetary authorities set the monetary base, and the interest rate is determined in the market; (2) the monetary base multiplier of bank deposits, and the role of reserve ratios; (3) the current three equation neo-classical consensus, which not only assumes perfect creditworthiness for all agents, but also an essentially nonmonetary system, e.g. no need for banks; and (4) the standard theory of the evolution of money. Monetary economics can only get better, but it has a long way yet to go, Goodhart concludes.

Agriculture & Nutrition

Countries

Economy

Enterprise

Environment

Ethics

History

Philosophy of Science

Politics

Society