Monetary Economics Essay Example | Topics and Well Written Essays - 2000 words - 1

Monetary Economics - Essay Example Monetary Economic growth is generally thought of as one-dimensional and is measured by increase in income. Monetary Economic development involves structural and functional changes and appropriate system of money supply. In the absence of effective measures of the latter however, states of development are estimated by the growth of income. Ordinarily, levels of income and rates of increase are given on a per capita basis, to approximate measures of efficiency and welfare (Shin, 2005, 1117). There are broadly three periods in the early history of monetary economic thought. The first is the period of early industrialisation in Europe, the second is the period of industrial revolution in England, i.e. the period from about 1775 to 1832, and the third period falls in the third quarter of the nineteenth century when other countries like Germany and the United States began to catch up with Britain and finally overtook it as the leading industrial power of the world. But monetary economic development as a discipline comprising systematic and scientific study may be said to have developed over the last few decades (Hahn, 2001). According to Malthus, as long as the wage level is above a certain minimum w0/ population tend to grow very rapidly. Since the actual w never rises above w0/ any short-run increase of the wage is sufficient to provoke a large enough upsurge in population to bring the wage down to a minimum level. Thus, if once the whole world were inhabited, population would increase in an arithmetic ratio as resources do, and not show a tendency of increasing in a geometric ratio, and then there would be progress. But this progress would consist of a proportional increase in the total quantity of capital and the total number of workers. There would be no increase in the standard of living since by hypothesis, every increase in the living standards, i.e.