Monetary Theory and Public Policy

Abstract

1. Introduction: The Significance of Monetary Analysis and Policy PART I 2. The Internal Value of Money * The Quantity Theory of Money * Determinants of Transaction Variables * An Evaluation of the Transaction Theory * The Income-Flow Equation of Exchange * Cash-Balance Equation of Exchange 3. Creation and Destruction of Money * Creation of Bank Credit * Multiple Credit Expansion By The Banking System * The Destruction of Bank Credit * The Creation and Destruction of Money by the State 4. The Theory of Inflation * Concept of the Inflationary Gap * Inflation and Full Employment * Analysis of Inflationary Pressures * Effects of Inflation * Inflationary Boom and Bust * Inflation and Deflation 5. Anti-Inflation Policies * Monetary Measures * Fiscal Measures * Nonmonetary Measures PART II 6. The Liquidity-Preference Theory * Liquidity-Preference * Liquidity-Preference Theory of Interest * The Interest Rate and Investment 7. Interest Policy and Full Employment * Rationale of the Low Interest Rate * Some Deterrents to Low-Interest Policy 8. Non-Keynesian Theories of Saving and Investment * Classical Savings-Investment Theory * Under consumption Theory 9. Aggregate Demand and National Income * Aggregate Demand and Employment * Concept of Gross National Product 10. The Consumption Function * Concepts of the Propensities to Consume and to Save * Some Relevant Implications of Keynes' Law * Factors Affecting the Consumption Function 11. Savings and Investment * Savings-Investment Equilibrium * Underemployment Equilibrium * Determinants of Investment 12. The Multiplier and Acceleration Theories * The Multiplier Theory * The Acceleration Theory 13. Secular Underemployment Equilibrium * Statement of the Problem * Factors of Secular Over saving * Factors of Secular Under investment 14. Measures to Promote Investment * Modification of the Corporate Income Tax * 'Pump Priming' * 'Compensatory Spending' * Wage Reduction * Credit Policy * The Reservoir Plan 15. Measures to Raise the Consumption Function * Income Redistribution * Wage Policy * Social Security * Easy Consumer Credit * Other Measures for a Higher Consumption Function 16. Epilogue on Full Employment PART III 17. The External Value of Money * Stable Exchange Rates * Specie-Flow-Price Mechanism * Devaluation 18. The External Value of Money * The Purchasing Power Parity Theory * Basic Defects of the Parity Theory * The Balance-of-Payments Theory of Exchange Rates * The Manipulation of Exchange Rates 19. The International Monetary Fund * Keynes' Basic Proposals * The Fund and Exchange Rates * The Fund and Exchange Control * The Fund's Lending Operations 20. Monetary Sovereignty and International Equilibrium * The Specialization vs. Payment Approach * The Mechanism of International Spread of Depression * A 'Chronic Shortage of Dollars' * Principles and Instruments of Monetary Sovereignty 21. Foreign Investment, The World Bank, and Employment * Foreign Investment and Cyclical Unemployment * Foreign Investment and Secular Stagnation Conclusions