Federal Reserve Bank of St. Louis Review | 2010
Authors:
DOI: 10.20955/r.92.265-302
Journal: Federal Reserve Bank of St. Louis Review
Year: 2010
Publisher: Federal Reserve Bank of St.Louis
Document Type: Article
Open Access: All Open Access; Gold Open Access
Cited by: 48
This essay articulates the principles and practices of New Monetarism, the authors' label for a recent body of work on money, banking, payments, and asset markets. They first discuss methodological issues distinguishing their approach from others: New Monetarism has something in common with Old Monetarism, but there are also important differences; it has little in common with Keynesianism. They describe the principles of these schools and contrast them with their approach. To show how it works in practice, they build a benchmark New Monetarist model and use it to study several issues, including the cost of inflation, liquidity, and asset trading. They also develop a new model of banking. © 2010, The Federal Reserve Bank of St. Louis.