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Milton Friedman on Monetary policy and the Federal Reserve

If I were to make up a balance sheet for the Federal Reserve, I could name many credit items on the research side, very few on the policy side.
Interview with Milton Friedman
Interview, 1992, Federal Reserve Bank of Minneapolis, The Region, Interview by David Levy, June 1, 1992
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  1. To avoid misunderstanding, let me emphasize that by using the term “natural” rate of unemployment, I do not mean to suggest that it is immutable and unchangeable. On the contrary, many of the market characteristics that determine its level are man-made and policy-made. In the United States, for example, legal minimum wage rates ( … ) and the strength of labor unions all make the natural rate of unemployment higher than it would otherwise be.
    The Role of Monetary Policy
    Journal article, 1968, American Economic Review 58, no. 1 (March 1968), pp. 1–17; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 214–224, p. 219 of the 1968 House reprint
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  2. The great contraction is tragic testimony to the power of monetary policy—not, as Keynes and so many of his contemporaries believed, evidence of its impotence.
    The Role of Monetary Policy
    Journal article, 1968, American Economic Review 58, no. 1 (March 1968), pp. 1–17; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 214–224, p. 216 of the 1968 House reprint
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  3. Analysis of the supply of money, and in particular of changes in the supply of money, is simple in principle but extremely complex in practice, both in our hypothetical world and in the current real world. Simple in principle, because the supply of money is whatever the monetary authorities make if, complex in practice, because the decisions of the monetary authorities depend on numerous factors.
    Money Mischief
    Book, 1992, Ch. 2 The Mystery of Money
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