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November 21, 2013 5:30AM 

# Four Old-Fashioned Monetarist Heresies 

By [George Selgin](https://www.cato.org/people/george-selgin) 

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1\) For any given growth rate of aggregate spending, lower actual rates of price and wage inflation mean *higher* levels of output and employment;

2\) For any given growth rate of aggregate spending, higher *expected* rates of price and wage inflation mean *lower* levels of output and employment;

3\) An increase in the growth rate of aggregate spending is not the same as an increase in the equilibrium rate of inflation;

4\) An increase in aggregate spending succeeds in raising the rate of inflation only in so far as it *fails* to increase output and employment.

I submit these old-fashioned monetarist heresies for the consideration of all those who think that an increased target rate of inflation will help us out of our present economic quagmire.

##### Related Tags 

[Monetary Policy](https://www.cato.org/monetary-policy), [Alt-M](https://www.cato.org/alt-m), [Center for Monetary and Financial Alternatives](https://www.cato.org/center-monetary-financial-alternatives) 

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