MONETARISM
24 May 2016 By PDSNETAn approach to economics developed by Milton Friedman in which he proposes that increases in the money supply have an almost direct impact on the inflation rate because the velocity of circulation is close to being constant. Friedman advocated that the money supply should be allowed to grow at a slow (2-3% per annum) but constant rate and not used as a policy instrument. This is as opposed to the Keynesian approach which encourages active intervention in the economy through manipulation of monetary policy.
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