SOME MONETARIST REFLECTIONS ON BUSINESS CYCLES

The important place that currency and bank credit have in the economy, give us the right to indicate them as major factors in determining business cycles. Starting from Mr. R. Hawtrey's famous statement "The trade cycle is a Purely Monetary Phenomenon", the paper aims to offer some guidelines about the role of monetary factors in the cyclical evolution of economy, as understood by the followers of the Monetarism, and some criticism of this theory. We also proposed ourselves to search the applicability of the key Monetarist approach elements on the Romanian business cycle. We found that the Romanian monetary authorities maintain a Monetarist attitude in terms of maintaining the price level stability and using low interest rate to stimulate the economy. We also observed for the case of Romania the existence of a phenomenon which the monetarist theory did not anticipate, the inflationary recession.