Testing Long-Run Monetarists’ Propositions in Some Industrialized Countries

The present study attempts to test the main monetarists’ propositions, which are rather ‘always and everywhere controversial’. The study considers three monetarists’ propositions, which deals with: the relation between money growth and inflation; money growth and output growth; and output growth and inflation. It considers ten industrialized countries for this purpose. Based on thirty-one years of annual data over the period 1963-1993 and using simple correlation coefficients and the Vector Autoregression models, the study found that ‘universality of monetarists propositions’ proposed by the Chicago school, is rejected as not all the countries supported it.