Current State of Monetary Economics
Since 1990, the classical form of monetarism has been questioned. This is because of events which many economists interpret as inexplicable in monetarist terms, especially the unhinging of the money supply growth from inflation in the 1990s and the failure of pure monetary policy to stimulate the economy in the 2001-2003 period. Alan Greenspan, former chairman of the Federal Reserve, argued that the 1990s decoupling may be explained by a virtuous cycle of productivity and investment on one hand, and a certain degree of "irrational exuberance" in the investment sector.
Economist Robert Solow of MIT suggested that the 2001-2003 failure of the expected economic recovery should be attributed not to monetary policy failure, but rather to the breakdown in productivity growth in crucial sectors of the economy, most particularly retail trade. He noted that five sectors produced all of the productivity gains of the 1990s, and that while the growth of retail and wholesale trade produced the smallest growth, they were by far the largest sectors of the economy experiencing net increase of productivity. "2% may be peanuts, but being the single largest sector of the economy, that's an awful lot of peanuts."
Read more about this topic: Monetary Economics
Famous quotes containing the words current, state, monetary and/or economics:
“It is not however, adulthood itself, but parenthood that forms the glass shroud of memory. For there is an interesting quirk in the memory of women. At 30, women see their adolescence quite clearly. At 30 a woman’s adolescence remains a facet fitting into her current self.... At 40, however, memories of adolescence are blurred. Women of this age look much more to their earlier childhood for memories of themselves and of their mothers. This links up to her typical parenting phase.”
—Terri Apter (20th century)
“If there is a gratification which I envy any people in this world it is to your country [Italy] its music. This is the favorite passion of my soul, and fortune has cast my lot in a country where it is in a state of deplorable barbarism.”
—Thomas Jefferson (1743–1826)
“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.”
—Ezra Pound (1885–1972)
“The new sound-sphere is global. It ripples at great speed across languages, ideologies, frontiers and races.... The economics of this musical esperanto is staggering. Rock and pop breed concentric worlds of fashion, setting and life-style. Popular music has brought with it sociologies of private and public manner, of group solidarity. The politics of Eden come loud.”
—George Steiner (b. 1929)