Milton Friedman on inflation
32 passages for “inflation”, 26 checked against the source. Page 2 of 4.
Full topic page: Inflation
The plain fact is that inflation is made in Washington, in that stately and impressive Grecian temple . . . that houses the Board of Governors of the Federal Reserve System.
The Inflationary FedColumn, 1973, Newsweek, August 27, 1973; reprinted in the Congressional Record, Extensions of Remarks, November 7, 1973, p. 36327, introduced by Representative Robert Huber of Michigan as “Mr. Milton Friedman’s article that appeared in Newsweek of August 27, 1973”, Congressional Record, November 7, 1973, p. 36327Inflation will not be stopped by words, only by actions. At the moment, we have the worst of two worlds. Nominal independence of the Federal Reserve without its effective exercise permits Congress and the President to evade responsibility for the creation of money to finance large government deficits.
Why Inflation PersistsColumn, 1977, Newsweek (October 3, 1977); reprinted in full in the Congressional Record, Extensions of Remarks, September 29, 1977, p. 31684, introduced by Representative Parren J. Mitchell of Maryland, who gives it as appearing “in the October 3, 1977, issue of Newsweek”, Congressional Record, September 29, 1977, p. 31684If 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 InflationColumn, 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 19787Inflation is the one form of taxation that can be imposed without legislation.
Monetary Correction: A Proposal for Escalator Clauses to Reduce the Costs of Ending InflationJournal article, 1974Instead of simply requiring the Federal Reserve to report its “projections” or “targets” for monetary growth, let the Congress require the Fed to achieve specified rates of monetary growth (or specified levels of the quantity of money) within specified ranges of tolerance. That would combine responsibility and power. It would also enable the ordinary citizen to know whom to hold accountable for inflation.
Why Inflation PersistsColumn, 1977, Newsweek (October 3, 1977); reprinted in full in the Congressional Record, Extensions of Remarks, September 29, 1977, p. 31684, introduced by Representative Parren J. Mitchell of Maryland, who gives it as appearing “in the October 3, 1977, issue of Newsweek”, Congressional Record, September 29, 1977, p. 31684Why do we have inflation? Because we, the citizens, have demanded it. We have sent a message to Washington. We said, we want you to spend more on roads. We want you to spend more on health. We want you to spend more on education. But don't tax us for it. … And so the difference is paid for by the hidden tax of inflation, which is the only tax that can be imposed on the American people without anybody having to vote for it.
The Open MindInterview, 1977, The Open Mind, hosted by Richard Heffner, Episode “A Nobel Laureate on the American Economy” (May 3, 1977)To state this conclusion differently, there is always a temporary trade-off between inflation and unemployment; there is no permanent trade-off. ( … ) The widespread belief that there is a permanent trade-off is a sophisticated version of the confusion between “high” and “rising” that we all recognize in simpler forms. A rising rate of inflation may reduce unemployment, a high rate will not.
The Role of Monetary PolicyJournal 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. 220 of the 1968 House reprintThe sharper response of production than of prices is typical. An inflationary process, once underway, develops an inertia of its own. It takes an economic slowdown to stop the acceleration of prices and, even then, it takes a long time to restore price stability. That is why it is so important to prevent inflation from gaining momentum.
Monetary PolicyColumn, 1968, Newsweek (June 3, 1968); reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 225–226, p. 226 of the 1968 House reprintThe only way you could get the inflation down was by having monetary contraction. There was no way you could do that without having a temporary recession. The great error in the earlier period had been that whenever there was a little contraction there was a tendency to expand the money supply rapidly in order to avoid unemployment. That stop-and-go policy was really what bedeviled the Fed during the '60s and '70s.
Commanding Heights: Milton Friedman interviewInterview, 2000, PBS, “On Ronald Reagan,” interview conducted October 1, 2000Inflation 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.