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Milton Friedman on Monetary policy and the Federal Reserve

In my opinion, it would be desirable for Congress to instruct the Federal Reserve to adopt this policy. That would assure that the Federal Reserve System would provide a steady and stable background for private and public economic policy, instead of being itself a source of instability as it so often has been in the past and as it is currently being at this very moment.
Statement to the House Subcommittee on Domestic Finance
Testimony, 1968, Compendium on Monetary Policy Guidelines and Federal Reserve Structure, Subcommittee on Domestic Finance, House Committee on Banking and Currency, 90th Congress, 2nd Session (December 1968), pp. 203–204
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  1. The first and most important lesson that history teaches about what monetary policy can do—and it is a lesson of the most profound importance—is that monetary policy can prevent money itself from being a major source of economic disturbance.
    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. 221 of the 1968 House reprint
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  2. 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 than in output. … A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society.
    The Counter-Revolution in Monetary Theory
    Lecture, 1970
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  3. In the present state of our knowledge, I believe that the best—or least bad—guideline for monetary policy is steady growth of the quantity of money at a rate that on the average will mean stable prices of final products.
    Statement to the House Subcommittee on Domestic Finance
    Testimony, 1968, Compendium on Monetary Policy Guidelines and Federal Reserve Structure, Subcommittee on Domestic Finance, House Committee on Banking and Currency, 90th Congress, 2nd Session (December 1968), p. 203
    Checked against the sourceRead the original

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