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Milton Friedman on Monetary policy and the Federal Reserve

I should like to emphasize that I do not regard this proposal as a be-all and end-all of monetary management, as a rule which is somehow to be written in tablets of gold and enshrined for all future time. ( … ) Such a rule seems to me the only feasible device currently available for converting monetary policy into a pillar of a free society rather than a threat to its foundation.
Should There Be an Independent Monetary Authority?
Journal article, 1962, In Search of a Monetary Constitution, ed. Leland B. Yeager (Harvard University Press, 1962), pp. 219–243; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 205–214, p. 214 of the 1968 House reprint
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  1. My conclusion is that an automatic commodity standard is neither a feasible nor a desirable solution to the problem of establishing monetary arrangements for a free society. It is not desirable because it would involve a large cost in the form of resources used to produce the monetary commodity. It is not feasible because the mythology and beliefs required to make it effective do not exist.
    Should There Be an Independent Monetary Authority?
    Journal article, 1962, In Search of a Monetary Constitution, ed. Leland B. Yeager (Harvard University Press, 1962), pp. 219–243; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 205–214, p. 206 of the 1968 House reprint
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  2. Targets should be expressed in terms of dollar levels of monetary aggregates rather than, or in addition to, growth rates. In 1975, Congress required the Fed for the first time to specify targets a year in advance. However, the Fed has evaded the intended discipline by stating targets in terms of growth rates applied to a shifting level of actual monetary totals. This device buried past mistakes and enabled the Fed to start fresh each quarter.
    Improving Monetary Policy
    Column, 1980, Newsweek, July 28, 1980; reprinted in the Congressional Record, Extensions of Remarks, July 28, 1980, p. 20026, introduced by Representative Robert Dornan of California, who gives the column as appearing in the Newsweek issue “dated July 28, 1980”, Congressional Record, July 28, 1980, p. 20026
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  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
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