Chapter VI

The Keynesian Revolution and the Monetarist Counter-Revolution*

As is well known from the field of economic history, the concept of revolution is difficult to transfer from its origins in politics to other fields of social science. Its essence is unexpected speed of change, and this requires a judgement of speed in the context of a longer perspective of historical change, the choice of which is likely to be debatable in the extreme. Leaving the judgemental issue aside for the moment, one could characterize the history of our subject in terms of a series of ‘revolutions’, very broadly defined, as follows. Economics as we know it began with what might be called the ‘Smithian revolution’ against the established body of doctrines generically ...

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