Monetarist Monetary Policy
Monetarist's believe to control the money supply to make sure the money supplied is equal to the money demanded.To achieve this they have to keep interest rates relatively constant, grow the money supply with the economy and stability in interest rates can come t the expense of the rest of the economy. However, since their number one goal is to maintain interest rates, they give up control over investment spending, the rate at which their economy grows or shrinks, their exchange rate and their unemployment rate.
*All info taken from lecture notes "Monetary Policy," slide 44.*
Monetarist's believe to control the money supply to make sure the money supplied is equal to the money demanded.To achieve this they have to keep interest rates relatively constant, grow the money supply with the economy and stability in interest rates can come t the expense of the rest of the economy. However, since their number one goal is to maintain interest rates, they give up control over investment spending, the rate at which their economy grows or shrinks, their exchange rate and their unemployment rate.
*All info taken from lecture notes "Monetary Policy," slide 44.*