1969: The Role of Money in Economic Activity: Complicated or Simple?

Abstract

A hot dispute currently rages as to the importance of money in influencing economic activity. But we would be wrong to think this a new controversy. Indeed, it is a very old controversy which has been with us for decades. Money was all-important in classical models of the economy but much less so in Keynesian models which gained predominance in the Great Depression and continued into the postwar period. Lately, however, there has been a strong revival of interest in monetary phenomena and this revival has led to the current heated dispute on the importance of money.