ABSTRACT
This chapter provides an exploration of the similarities of the Keynesian and monetarist approaches which are, sufficiently close to merit saying that they share a common 'vision' of the world. A related debate was initiated by M. Friedman and D. Meiselman who sought to contrast a naive Keynesian position with a naive monetarist position. The view that Keynesians stress the role of quantity adjustment rather than price adjustment, and that monetarists stress the reverse can be illustrated in numerous ways. The chapter discusses the different approach to illustrate the basic similarity of the Keynesian and monetarist approaches. The similarities of Keynesians and monetarists stem in part from acceptance of an atomistic competition view of the world. The use of the atomistic competitive model to represent the supply-side of the economy creates a strong presumption in many minds that provided there is some price flexibility full employment will sooner or later be reached.
