DEFINITION of 'Monetarist'

An economist who holds the strong belief that the economy's performance is determined almost entirely by changes in the money supply. Monetarists postulate that the economic health of an economy can be best controlled by changes on monetary supply, or money, by a governing body. The key driver behind this belief is the impact of inflation on an economy's growth or health and the belief that by controlling the money supply one can control the inflation rate.

BREAKING DOWN 'Monetarist'

The most well known monetarist would have to be one Milton Friedman, who wrote about his beliefs in the book "A Monetary History of The United States, 1867 - 1960." In the book he, along with Anna Schwartz, argue in favor of monetarism as a combat to the economic impacts of inflation. Other monetarists include former Federal Reserve Chairman, Alan Greenspan, and former U.K. Prime Minister, Margaret Thatcher.

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