- New research suggests that the link between money growth and inflation holds when inflation is high
- Do rate-setters need to consider more monetarist views?
Is monetarism making a comeback?
In simple terms, monetarism is the idea that “inflation is always and everywhere a monetary phenomenon”, or that there is a stable relationship between the supply of money and the inflation rate. The theory was espoused by economist Milton Friedman in the 1970s, but later fell from prominence as a predictable relationship between inflation and money supply seemed to disappear.