Monetarism

By | October 30, 2011

Trying to document a very small piece of learning from my challenge to @dkernohan for our new-non-existent-but-hopefully-will-be-created-soonUPDATE: EXISTing make-a-wish-MOOC #econoMOOC.

Monetarism- fixing price deflation

Monetarism- fixing price deflation

“price deflation can be fought by dropping money out of a helicopter” Friedman, M.

money photo cc licensed ( BY ) flickr photo shared by AMagill and Helicopter from Apocalypse Now

Looking at Milton Friedman and monetarism from Wikipedia.

Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between price inflation and the money supply, mainly that price inflation should be regulated with monetary deflation and price deflation with monetary inflation. He famously quipped that price deflation can be fought by “dropping money out of a helicopter.

There were so many concepts to deconstruct that I got a bit mired. In particular, I remember our dear Canadian prime minister (before he was prime minister) giving a speech saying something to the effect of:

“Canada is a Northern European welfare state in the worst sense of the term, and very proud of it” – Stephen Harper (1997). Council for National Policy. Montreal.

It has been his goal to move us away from this, into a more free market economy which I think means towards a more monetarist economic model.

Now I would like someone from my #econoMOOC to look at this and tell me if I’m on the right track.

7 thoughts on “Monetarism

  1. Steve

    Monetarism is but one of many models of a free market economy. The basic idea behind monetarism is that the supply of money is the primary determinant of changes in economic activity (i.e. production, sales, jobs) in the short term (say 1 – 5 years). Increase the money supply and you get more production, more sales, and more jobs. But only in the short term. Over the longer term, changes in the money supply translate into proportional changes in prices, i.e. inflation. In the long term, changes in economic activity are driven more by what’s going on on the supply side of the economy: changes in the labor supply, technology and the stock of equipment, factories, office buildings and other forms of economic capital. One practical problem with the theory of monetarism is how to define money. That turns out to be harder than you might think. Is it cash, checking account balances, savings, credit more generally?

  2. Jim

    This is pretty awesome, but using an animated GIF to encapsulate a concept, as well as Steve Greenlaw replying here. Awesome.

  3. dkernohan

    @giulia beautifully done. And Steve Greenlaw’s comment is perfect, in that it now gives me a load more concepts I wanna learn about.

    I’d always heard about monetarism on the news, and had a vague idea that it generally led to ideas that I didn’t like. Now I feel as if I am beginning to ubderstand why – though I figure that next I need to learn more about some of the debates concerning what money actually is.

    #economooc #4life !!!

    N.B: are we also demonstrating that you can use a #ds106 style MOOC to learn a traditional subject?

  4. Martha

    I’ve been thinking for a while that the repository of assignments from #ds106 could be adapted to any number of disciplines. Really, what we’re talking about is developing a media literacy and adeptness at manipulating media to convey ideas and narratives. I think that be generalized to any number of disciplines. I love this!!

  5. Giulia

    @Steve, thank you so much. I really appreciate that you took the time to comment. I have a lot of variables to consider; I will revisit this.
    @Jim, as a nexus model 5, it’s really the least I could do. Thanks for introducing us to Steve!
    @dkernohan, YES, that is exactly what I am trying to prove, along with what Martha is saying, I have always imagined that ds106 was a first layer course that we would use to scaffold the media literacy learnings to discipline specific analyses.
    I’m not sure if it will be successful or scalable but it makes my learning engaging, meaningful and a beautiful experience.

  6. Darren Kuropatwa

    Such a rich short post!

    I love the way your animated gif illustrates the Milton Friedman quote and the conversation that ensues. It’s got me thinking and wanting to learn more about monetarism and other competing models of free market economies.

    Re: ds106 assignment repository; that has been the biggest inspiration for the course I’m currently teaching here in Winnipeg with @rdaigneault at Université St. Boniface: Narration numérique.

    I think that’s just the tip of the iceberg. Listening to Jim’s recent keynote at the OpenEd Conference got me thinking: “Why don’t we have students design all of their own assignments?” Get the teacher to sign off on whatever it is and some students may need more scaffolding than others, sure, but keep in mind Jim’s experience of the iTunes playlist poetry assignment. At first, he thought it was lame, then it really took off and people did wonderful things with it.

    I think that has a lot to do with learning in the open where people’s thinking is visible. We learn so much just from looking at how other people create while we’re working on our own stuff. I saw this happen in my math classes in the past and most recently in my narration numérique class a few weeks ago. The students were working on creating one slide (powerful quote + powerful cc flickr pic) in a shared Google Presentation. When the first student was done she started browsing through everyone else’s work. I was standing near her when I heard her say just under her breath (en français) … “Woah, I don’t think I’m done yet.” That’s my “teacher happy place”. 😉

  7. Bryan

    As I just posted over on Dave’s blog, how quickly this idea has taken root, and then flight, is truly staggering.

    I’m also pretty grateful that the Econ teacher at our school has allowed me to drag his AP Econ12 class into the mix here, not only to see what types of things could be done in this realm of media literacy and networked learning within the K-12 context, but to also look at this type of distributed, community learning as a potential future for our public schools.

    I’m with Darren in saying that Jim’s keynote was a great push in thinking about the potential for (all of) our institutions to become spaces for connection, a venue for an ongoing happening, and a community of ideas and learning for all who find their way into the MOOC. But it’s also something more at the root of education, something brought home to me by our school’s drama teacher who retired the summer before I started teaching guitar. On the last day of school he told me not to worry about what guitar might become (I had no idea). “Any course you teach,” he said, “is just a means of teaching kids how to form and be a part of communities.”

    He was a teacher-idol of mine who wrote four or five plays for his classes to perform every semester on a typewriter, but I see his genius in this type of community-formation, and told the Econ kids as much today (they were in grade nine when he retired), who are charged in the same way that all of us are to be engaged with a community of like minds that is bringing our school together, but also the wider web.

    I can’t wait to see what you all are able to lend our class’ learning, and where threads of conversation begun in our school building travel out into the world…

    As ever, it is a pleasure to be a part of something so rich in possibility with so many inspiring minds.

    #Economooc #4life

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