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The answer is, because, in the second period, total demand all over was increasing.”. Friedman’s monetary view of the inflation process led him to dismiss “incomes policy”— i.e., direct controls on wages and prices—as an alternative or supplement to monetary policy in fighting inflation.
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- Taxation without Representation
- The Keynesian Theory
- Escalator Clauses
- The Financial Intermediaries
- Discussion
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In a way the argument for indexing both taxes and government borrowing has only an incidental relation to the present problem of inflation. Its fundamental purpose, in my opinion, is to improve our political institutions. As I have repeatedly said, inflation is a form of taxation without representation. It is the kind of tax that can be imposed wit...
That argument is capable of being logically valid but I think it is not empirically relevant. It implicitly assumes that somehow or other the total expenditures of governments are independent of their sources of revenue. A great fallacy in much of the so-called Keynesian analysis has been to suppose that you can treat expenditures as if they were d...
In the wage field in the United States there are something like 10 million union employees covered by cost-of-living escalator clauses. In Britain you did an unwise thing in imposing by legislation a threshold agreement: that was undesirable because it was exactly this imposition of a general rule rather than allowing the arrangements to be reached...
We have in the United States, as you have here, savings and loan associations,2 mutual savings banks, and so on, of very major magnitude. Their total liabilities at the moment are something like $400 billion. These institutions have been ‘gambling’ for quite a long time by lending long and borrowing short and they are now stuck with a portfolio of ...
GEORGE SCHWARTZ—With the ‘greenback’ debacle in the middle of the 19th century private people did index their contracts by inserting a gold clause. What happened to that solemn contract between private people agreeing that the terms of the contract should be based on the gold clause? It was arbitrarily abrogated by the Roosevelt administration. Are...
Friedman argues that inflation is a form of taxation without representation and that indexing taxes and government borrowing is essential to improve political institutions. He also discusses the technicalities and benefits of indexing and the moral and economic case for purchasing power securities.
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 broader ...
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Friedman argues that the British inflation crisis of the 1970s was the result of bad economic policies, such as fixed exchange rates, deficit financing, and wage and price controls. He criticizes the mainstream economics for ignoring the role of monetary factors and the natural rate of unemployment.
Apr 13, 2022 · Learn how inflation is caused by too much money in the economy and how central banks control the money supply. Explore the arguments for and against rules-based monetary policy and the lessons from the 1970s.
Jun 16, 2022 · Learn about Milton Friedman, the American economist who challenged Keynesian theory and advocated for free-market capitalism and monetarism. Find out how his research on consumption, monetary history, and stabilization policy influenced inflation and economic policy.
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