Keynesians believe Government is the spender of last resort
Monetarists believe Government is the lender of last resort
Austrians believe Government is the last resort.
Any more pithy suggestions?
Actually, rephrase Austrains believe that the Government is never the last resort, then you got it right.
but because montarists believe in the quantity theory of money don’t they also implicitly believe that fed intervention is inefficient?
So I think you should switch the first and second sentences: Montarists believe in spending and Keynesians believe in lending? And yes, the austrians believe in no government.
No? Monetarists believe that in a “liquidity crisis,” central banks need to fulfill the lender of last resort role.
still, if the equation for the quantity theory holds, then it is impossible for interest rate reductions and money supply increases to cause a multiplier effect because money is instantaneously created everywhere. Therefore there can only be inflation when money is made but no new net buying can occur because the world is the same as it had been except with a bunch of new money everywhere.
And if the monetarists believed in monetary policy so much, then what would make them different from keyensians?
Three things:
- The quantity theory speaks only of long run results. It doesn’t assume that money is instantly created everywhere at once.
- The goal of monetary intervention is to prevent monetary contraction, which is harmful for the economy.
- Keynesians focus on fiscal intervention, not monetary intervention.