Monetarism

Monetarism is a school of economics that studies the impact of monetary policy in the state of national income. Within this department of economics there are a number of theoretical and ideological differences.
Monetarism as a contemporary school of economics was built around 1956. His birth is considered the publication of Milton Friedman called. quantity theory of money.
Friedman argued that the demand for money is strictly dependent on several economic variables and may be relatively easily calculated. Thus, if the state will increase the emission of money over the calculated value, it will cause an excess of fast money in the balance sheets of individual men, who shall use them for the additional consumption. Additional consumption will cause a temporary increase in living standards. In the long run, this temporary increase in the standard, however, will not have coverage in the supply of goods, which is only dependent on the production capacity, which by the mere fact that the issue of money does not change. Causes a temporary increase in consumption but in the long term steady growth needs, which implies a continuing focus on increased money supply. In this situation, the State or to continue to increase the money supply causing inflation, or cause public discontent cut off his income. This view stood in sharp contrast to the current time Keynesianism, who proclaimed that "the amount of money in the economy is of secondary importance" and that the resulting increase in emissions does not automatically cause an increase in consumption.