Wither fiscal policy

The anti-Keynesian revolution gained serious momentum following the stagflation episode. Monetarists had established monetary policy as the dominant instrument for economic stabilisation. According to Friedman and other Monetarists’, for example, Allan Meltzer and Karl Brunner, the conduct of monetary policy should be guided by simple, fixed rules.

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Compare the pair

International Monetary Fund (IMF) policies do not recognise the importance of full fiscal-monetary sovereignty to the conduct of fiscal (government) policy. Specifically, mainstream notions of fiscal sustainability are not applicable to sovereign economies.

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