What is the monetarist?
Monetarist is an individual who keeps understanding that fluctuations in economic conditions are created because the offer of money within this economy is increasing or decreasing. The general concept of monetarism is often attributed to the work of Milton Friedman, who combined the flow of money in the economy of the government's efforts to control this flow. It is not uncommon for a monetarist that he will also notice the level of unemployment as a factor that affects the flow of money, and thus has a significant impact on how the government structures its monetary policy.
In the simplest terms, the monetarist usually accepts the theory that the level of social expenditure has a direct impact on the level of inflation that is experienced in the economy. This means that in situations where social expenditures are higher, the potential of inflation is to increase. If social expenditures were limited in some way, this will help reduce the possibility of inflation, Since less money is freely distributed through the economy.
As well as the products of an increase in inflation, the monetarist also often states that the logical result of this economic situation is that the labor market is less flexibility. In other words, people will be more difficult to find and secure jobs that make it possible to earn enough money to maintain their purchasing power during the inflation period. At the same time, this period of inflation may undermine productivity due to increased costs that may lead to companies to reduce production and the number of workers needed to maintain this production. With a smaller disposable income to feed the economy, it is growing and inflation is likely to continue if the steps to repair imbalances are not taken.
The monetarist will tend to promote the creation of specific strategies that have the effect of stimulating money inventory in the economy. This in turn results in the renewal of flexibility in the labor market, which makes it easier for displaced workers to find jobs that fairly pay and UMThey come to enjoy a decent standard of living. At the same time, inflation begins to distinguish as productivity increases and the competition is restored to the market. Although the theory of monetarism can be used in relatively simple and simple ways, there are also many adaptations of basic theory that a monetarist can develop in the light of specific conditions that exist in the economy. These approaches can be further adapted to match the localized economy, for example in a state or parish; apply to the national economy; Or even be used to solve problems in the world economy.