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Milton Friedman famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money...
This prin-ciple underlies the monetary policy framework of major economies today. Friedman was particularly scathing about “cost-push” theories, prevalent in the 1960s and 1970s, that attributed high inflation to autonomous increases in costs rather than to excess demand.
The inflation of the last few years is blamed on two things: first, the activities of aggressive trade unions, and, secondly, the unfortunate behavior of world prices, in particular world commodity prices, combined with the unfortunate behavior of the British exchange rate.
Mar 21, 2016 · It is a cure that's easy to describe but difficult to apply: The government must reduce spending and print less money. The alternatives are both recession and double-digit inflation. Recorded at...
If prices rise by 10 per cent per year, people have to collect more of these pieces of paper that are labelled pounds in order to keep the purchasing power of their cash balances constant. And those extra pieces of paper are the equivalent of vouchers certifying to the payment of a tax.
INFLATION AND UNEMPLOYMENT. Nobel Memorial Lecture, December 13, 1976. by MILTON FRIEDMAN The University of Chicago, Illinois, USA. When the Bank of Sweden established the prize for Economic Science in memory of Alfred Nobel (1968), there doubtless was - as there doubtless still remains - widespread skepticism among both scientists and the ...
May 23, 2024 · Friedman’s rational behavior argument was that consumers dealing with long-term inflation eventually build expectations of future inflation into saving and spending decisions, which eventually ...
