Jennifer Burns

And then there's different institutional architectures of postal savings banks and credit unions. But Friedman is, one, taking the focus to these aggregate amounts of money and saying these really have a lot to do with economic booms and busts. When we have an expansion in the amount of available money, we see an expansion in economic activity.

When we have a contraction in available money, we have a contraction. And so... He says, at this stage, the government, through the mechanism of the Federal Reserve and its influence on interest rates, can either make money more cheaply available and more freely available in the economy or can make money more expensive and slow things down.

When we have a contraction in available money, we have a contraction. And so... He says, at this stage, the government, through the mechanism of the Federal Reserve and its influence on interest rates, can either make money more cheaply available and more freely available in the economy or can make money more expensive and slow things down.

When we have a contraction in available money, we have a contraction. And so... He says, at this stage, the government, through the mechanism of the Federal Reserve and its influence on interest rates, can either make money more cheaply available and more freely available in the economy or can make money more expensive and slow things down.

But the central core idea of monetarism is this is potentially very bad. If the government can hit the gas and then hit the brake and hit the gas and hit the brake based on, say, what a politician wants or what somebody at the Federal Reserve wants, you have a lot of instability in the system. And so...

But the central core idea of monetarism is this is potentially very bad. If the government can hit the gas and then hit the brake and hit the gas and hit the brake based on, say, what a politician wants or what somebody at the Federal Reserve wants, you have a lot of instability in the system. And so...

But the central core idea of monetarism is this is potentially very bad. If the government can hit the gas and then hit the brake and hit the gas and hit the brake based on, say, what a politician wants or what somebody at the Federal Reserve wants, you have a lot of instability in the system. And so...

One of the core policy proposals of monetarism is let's grow the money supply at a steady rate. And in the beginning, Friedman just says K percent. He doesn't even put a number on it because he says the number doesn't matter. What matters is the steadiness in the growth rate, because if it's a steady growth rate, it will fade away.

One of the core policy proposals of monetarism is let's grow the money supply at a steady rate. And in the beginning, Friedman just says K percent. He doesn't even put a number on it because he says the number doesn't matter. What matters is the steadiness in the growth rate, because if it's a steady growth rate, it will fade away.

One of the core policy proposals of monetarism is let's grow the money supply at a steady rate. And in the beginning, Friedman just says K percent. He doesn't even put a number on it because he says the number doesn't matter. What matters is the steadiness in the growth rate, because if it's a steady growth rate, it will fade away.

And then people will make economic decisions based on the fundamentals, not based on what they think is going to happen, not based on hedging against inflation or hedging against deflation. They'll just be able to function. So this is sort of the paradox of monetary policy. When it's happening right, you don't see it, you don't notice it.

And then people will make economic decisions based on the fundamentals, not based on what they think is going to happen, not based on hedging against inflation or hedging against deflation. They'll just be able to function. So this is sort of the paradox of monetary policy. When it's happening right, you don't see it, you don't notice it.

And then people will make economic decisions based on the fundamentals, not based on what they think is going to happen, not based on hedging against inflation or hedging against deflation. They'll just be able to function. So this is sort of the paradox of monetary policy. When it's happening right, you don't see it, you don't notice it.

When it's happening wrong, Friedman argues, it can just fundamentally destabilize everything. It can cause the Great Depression. It can cause an artificial boom. And so he's taking monetary policy at a time when most economists think it's completely irrelevant and saying this is the central game of the economy. Now, we live in a world where we believe this.

When it's happening wrong, Friedman argues, it can just fundamentally destabilize everything. It can cause the Great Depression. It can cause an artificial boom. And so he's taking monetary policy at a time when most economists think it's completely irrelevant and saying this is the central game of the economy. Now, we live in a world where we believe this.

When it's happening wrong, Friedman argues, it can just fundamentally destabilize everything. It can cause the Great Depression. It can cause an artificial boom. And so he's taking monetary policy at a time when most economists think it's completely irrelevant and saying this is the central game of the economy. Now, we live in a world where we believe this.

And the Federal Reserve chair can't open their mouth without headlines being generated. But Friedman is saying this at a time when the Federal Reserve is like a mysterious and secretive organization. It's not well known. It's not deeply appreciated. Some of the only people who appreciate the Fed's power are like hardcore rural populists.

And the Federal Reserve chair can't open their mouth without headlines being generated. But Friedman is saying this at a time when the Federal Reserve is like a mysterious and secretive organization. It's not well known. It's not deeply appreciated. Some of the only people who appreciate the Fed's power are like hardcore rural populists.

And the Federal Reserve chair can't open their mouth without headlines being generated. But Friedman is saying this at a time when the Federal Reserve is like a mysterious and secretive organization. It's not well known. It's not deeply appreciated. Some of the only people who appreciate the Fed's power are like hardcore rural populists.

who have constituents who think the banks and money power are the problem, who are like throwbacks from the frontier days. So Friedman in the beginning has no constituency for this policy. He has no constituency for this analysis. And so just going back to summarize monetarism, it's using the quantity theory of money to analyze the macroeconomy.