Monetarist Theory

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DEFINITION of 'Monetarist Theory'

An economic concept which contends that changes in the money supply are the most significant determinants of the rate of economic growth and the behavior of the business cycle.

INVESTOPEDIA EXPLAINS 'Monetarist Theory'

One of the major economic concepts of our modern day, monetarist theory enjoyed academic and government acceptance in the 1980s. It can be attributed largely to the work of well-known economist Milton Friedman.

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