Monetary Economics In Ackley's Theory Of Economics And Macroeconomics

In Ackley's view, monetary policy is viewed as being a cautious effort by monetary authorities (C. B. N) to control or regulate the stock of money or credit conditions for the tenacity of achieving certain economic objective. One objective of monetary policy is the realization of the high rate of or full employment, this doesn’t suggest that there is zero unemployment since there is always an amount of friction due to voluntary or seasonal unemployment (Ackley, 1978). Monetary economics have both a microeconomic and a macroeconomics element. Monetary economics under the microeconomics concerns itself with the definition of money and how it’s demanded and supplied, while the monetary macroeconomics concerns itself with the formulation of monetary policy and its impact on the economy. For analysis during the short-run, monetary economics is a central part of macroeconomics. The main paradigm of the macroeconomics is the Classical and Keynesian ones. The classicalist studies the competitive economy at its full employment equilibrium, while the Keynesians focuses on its deviations away from this equilibrium. (Jagdish, 2009)

Its main focus is on monetary and other financial markets, determination of interest rates, extent to which monetary policy influences the behavior of the economic units and the implication such influence have in the context of macroeconomics. Hence, monetary policy could be defined as an economics of money supply, prices and interest rate, and their consequences in the economy. It therefore focuses on monetary and other financial markets, determination of interest rate, extent to which these policies, influences the behavior of economic units and the implications the influence has in the macroeconomic context. (Jagdish,