The first part works (since MF _defines_ monetarism), but monetarism isn't the only kind of reactionary and laissez-faire macroeconomics. Alan Greenspan is no monetarist. He focusses on interest rates (rather than money supplies) and tries to fine-tune the economy (rather than following the monetarist rule that the money supply should increase at a constant rate, totally independent of policy-maker will).
At the U of Chicago, there's a version of reactionary and laissez-faire economics which isn't monetarist, i.e., real business cycle theory. Unemployment is unimportant or nonexistent in this view. Markets "clear" all the time. The business cycle results from unexplained changes in productivity. I've never understood this, but supposedly recessions occur due to negative technology shocks, _falling_ labor productivity. A popular version of RBC theory is "supply-side economics" (Laffer, Wanniski, etc.)
Also, most practitioners of what's called "new Keynesianism" (Greg Mankiw, R.J. Gordon, etc.) share a lot with monetarism, perhaps much more than with classical Keynesianism or post Keynesianism. "New Keynesianism" might just as well be termed "new monetarism." If so, monetarism isn't completely dead.
Like the monetarists, the NK focus is on monetary policy (rather than fiscal policy, the emphasis of the old Keynesians). Actually that makes sense, because Reagan-era deficits drove the US gov't debt up high, making deficit spending harder to pull off. (The worry is that interest payments on the outstanding debt will lead to deficits that will raise the debt, in a vicious circle.) Also, the shift to floating exchange rates privileges monetary policy. (Like AG, the NKs focus on interest rates rather than monetary aggregates.)
What doesn't make sense is the main NK emphasis on wage stickiness (and other deviations from the utopian Walrasian general-equilibrium model) as an explanation of unemployment. Keynes himself argued that wage cuts in recessions and especially in depressions can make things worse, as did Irving Fisher. (Marx, of course, argued that some unemployment is necessary to the persistence of profits and of capitalism itself. But it is possible to imagine that there might be _too much_ unemployment from a capitalist perspective, as in the 1930s.)
Some NKs are better, providing revealing financial models. But they, like the others listed above, are limited by their neoclassical training (static thinking, a class-free understanding of the world, etc.)
At 02:05 PM 9/18/98 -0700, Brad wrote:
>Rick Mishkin believes that monetarism has been abandoned as an operating
>strategy by the Bundesbank as well. He thinks that they now do what they
>want to do (i.e., raise interest rates when inflation rises above 2.5%,
>chuckle with glee whenever inflation falls below 2%) and find a monetarist
>justification for it...
>>
>>Doug wrote:
>>Monetarism is pretty washed up too, except in the Bundesbank ...
Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html Bill's song: "Forgive me when my instincts start stinking; I'm easily led when my little head does the thinking." (lyrics by John Hiatt.)