• Corpus ID: 17176698

The Continuing Muddles of Monetary Theory: A Steadfast Refusal to Face Facts By C.A.E. Goodhart Financial Markets Group London School of Economics

  title={The Continuing Muddles of Monetary Theory: A Steadfast Refusal to Face Facts By C.A.E. Goodhart Financial Markets Group London School of Economics},
  author={Lionel Robbins},
There has been a remarkable gulf between mainstream monetary theory and reality in recent decades. Amongst the worst examples are:(1) IS/LM: the monetary authorities set the monetary base, and the interest rate is determined in the market; (2) The monetary base multiplier of bank deposits, and the role of reserve ratios; (3) The current three equation neo-classical consensus, which not only assumes perfect creditworthiness for all agents, but also an essentially non-monetary system, e.g. no… 
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