Monetary-disequilibrium Theory

Monetary-disequilibrium Theory


Monetary disequilibrium theory is basically a product of the Monetarist school mainly represented in the works of Leland Yeager and Austrian macroeconomics. The basic concept of monetary equilibrium (disequilibrium) was however defined in terms of an individual's demand for cash balance by Mises (1912) in his Theory of Money and Credit.

Monetary Disequilibrium is one of three theories of macroeconomic fluctuations which accord an important role to money. The others being the Austrian theory of the business cycle and one based on rational expectations.

Read more about Monetary-disequilibrium TheoryHistory of The Concept, Early Monetary-equilibrium Theory, Monetary-equilibrium in The Austrian School, Synthesis of The Yeager and Austrian Theory, Monetary-equilibrium, Loanable Funds and Interest Rates, Monetary Equilibrium, Classics and Keynes, Problems With Monetary-disequilibrium Theory

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Problems With Monetary-disequilibrium Theory
... According to Yeager, monetary-disequilibrium is a part of the monetarist tradition which states that "money matters the most" which cannot be true as in terms of ... definition of equilibrium at the heart of monetary-disequilibrium theory is flawed as he uses a very neoclassical definition on the macro-economic level i.e ... consideration that business cycles start not just with monetary-disequilibrium but happens when that disequilibrium enters the market for lonable funds and produces disequilibrium there, such ...

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