Skip to content

Milton Friedman on Inflation

If the relation that has prevailed between money and prices for the past dozen years continues, and if the Federal Reserve continues to permit the quantity of money to grow by 10 per cent a year, inflation will proceed at a rate of about 6 per cent. Judged not by pronouncements, not by intentions, but by performance, that is the rate that monetary policy for the past four years has been directed at producing.
Perspective on Inflation
Column, 1974, Newsweek (June 1974); reprinted in the Congressional Record, Extensions of Remarks, June 18, 1974, pp. 19786 to 19787, introduced by Representative Jack Kemp of New York, who calls it “his column this week in Newsweek.” The reprint gives no issue date, and the chart that ran with the column is not reproduced, Congressional Record, June 18, 1974, pp. 19786 to 19787
Checked against the sourceRead the originalCite this passage

Where this comes from

Checked against the sourceThe wording was checked against the work itself.

Topics

He also said

  1. The widespread impression that the Fed has tightened is based on the mistake of judging monetary policy by interest rates, which the Fed cannot control, rather than by the quantity of money, which it can. The quantity of money is still growing as rapidly as it has for the past four years.
    Perspective on Inflation
    Column, 1974, Newsweek (June 1974); reprinted in the Congressional Record, Extensions of Remarks, June 18, 1974, pp. 19786 to 19787, introduced by Representative Jack Kemp of New York, who calls it “his column this week in Newsweek.” The reprint gives no issue date, and the chart that ran with the column is not reproduced, Congressional Record, June 18, 1974, pp. 19786 to 19787
    Checked against the sourceRead the original
  2. For both long and short periods there is a consistent though not precise relation between the rate of growth of the quantity of money and the rate of growth of nominal income. If the quantity of money grows rapidly, so will nominal income, and conversely. The relation is much closer for long than for short periods
    Money Mischief
    Book, 1992, Ch. 2 The Mystery of Money
    Not yet checked
  3. The future well-being of this country depends critically on whether, this time, intentions are translated promptly into performance.
    Perspective on Inflation
    Column, 1974, Newsweek (June 1974); reprinted in the Congressional Record, Extensions of Remarks, June 18, 1974, pp. 19786 to 19787, introduced by Representative Jack Kemp of New York, who calls it “his column this week in Newsweek.” The reprint gives no issue date, and the chart that ran with the column is not reproduced, Congressional Record, June 18, 1974, pp. 19786 to 19787
    Checked against the sourceRead the original

Think this quote is wrong, misattributed, or missing context?Report it and it gets fixed, not argued with.