A revival of the quantity theory of money, monetarism asserts that increases in the money supply cause inflation ('too much money chasing too few goods').
Monetarism emerged as an important economic doctrine under the influence of American economist Milton Friedman (1912-1992). Its adherents challenged the Keynesian approach to macroeconomics, emphasizing the importance of monetary policy in stabilizing the economy.
Laissez-faire is generally associated with monetarists, who avoid active manipulation of the economy by government. Believing that the money supply is the major determinant of nominal GNP, they tend to believe that fluctuations in the economy result from erratic growth in the money supply.