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Brad Bateman wrote: 
 
> This is why I had suggested an "international" group; I was thinking of a 
> study of when and why monetarism had been adopted in different countries  
> and when why it was abandoned in its formulation as a theory of  
> macro-policy by monetary aggregate targeting. 
>  
 
I suggest that if such an international group were formed they take a 
moment to make a distinction between  
 
1.  "monetarism as a policy that uses the growth rates of  one or more  
particular definitions of the money supply as an index of the ease or  
tightness of monetary policy"  
 
and 
 
"monetarism" as an orthodox response to those who find the quantity-theory 
tradition in economics insightful  especially as it relates to the broader 
constraints and limitations on what is possible in the economy.  For 
example, among the classical school writers the quantity tradition held 
that an overall rise in prices, initiated perhaps by a generalized rise in 
wages, would not stick unless the overall supply of cash (liquid) balances 
were increased as well.  This doctrine applied to simple versions of 
hydraulic Keynesians (those who carried the "Keynesian cross" in academic 
teaching) suggest that increases in aggregate demand by themselves  will 
not have the effects championed by their advocates unless the cash or 
liquid balances of the community were somehow simultaneously increased as 
well.   
 
This version of monetarism is a much more profound conceptual orientation 
about how the economy actually works, than whether or not a simple policy 
heuristic works or doesn't work to guide central bankers and business 
leaders when they make forecasts. 
 
I think it makes a big difference as to how we think of monetarism.  In the 
case of Keynesianism matters are different.  It was clear that this 
movement proclaimed that the orthodox description of how things worked was 
deeply flawed.  Both the quantity theory tradition and Say's law were 
challenged along with the fundamental theorems of orthodox economics.  In 
my view, monetarism is more than "money matters much" but instead a return 
and reaffirmation of orthodox methods or reasoning about the economy and 
its principal mechanisms and institutions.   
 
Laurence S. Moss 
 
 
 
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