A Quote by Milton Friedman
If you continue to use monetary policy to attempt to promote full employment the result would be that you would have higher inflation, and that you would not have lower unemployment.
Related Quotes
Monetary policy will, as always, respond to the economy's twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals.
Efforts to promote financial stability through adjustments in interest rates would increase the volatility of inflation and employment. As a result, I believe a macro-prudential approach to supervision and regulation needs to play the primary role.
The unique aspect of today's monetary inflation is that it is not limited to one country, but a host of countries are all inflating together. As a result of the monetary inflation (when all of the newly created money begins to leave the banks and enter the system), the price inflation will be worldwide.
It was gradually learned that acceptance of a somewhat higher inflation rate would not really bring somewhat higher employment.
Inflation is certainly low and stable and, measured in unemployment and labour-market slack, the economy has made a lot of progress. The pace of growth is disappointingly slow, mostly because productivity growth has been very slow, which is not really something amenable to monetary policy. It comes from changes in technology, changes in worker skills and a variety of other things, but not monetary policy, in particular.
My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation.
You would think that if any group in America had 20% to 25% unemployment, it would generate all kinds of attention. The Labor Department would understandably and necessarily begin to concentrate on what can we do to reduce this level of unemployment. Congress would give great time on the floor for debate on what can be done.
Because tax cuts create an incentive to increase output, employment, and production, they also help balance the budget by reducing means-tested government expenditures. A faster-growing economy means lower unemployment and higher incomes, resulting in reduced unemployment benefits and other social welfare programs.
What I'm trying to say is that for the average investor, what I would encourage them to do is to understand that there's inflation and growth. It can go higher and lower and to have four different portfolios essentially that make up your entire portfolio that gets you balanced.
What I'm trying to say is that for the average investor, what I would encourage them to do is to understand there's inflation and growth - it can go higher and lower - and to have four different portfolios essentially that make up your total portfolio that gets you balanced.
I think the team that successfully puts together an economic and social policy framework for global full employment in decent working conditions based on local development, that would command the support of all stakeholders and all international organizations concerned, should be awarded the [Nobel] prize. I am sure they would get it not just for economics, but also for peace in the world.
If Australia finds it has a strong Australian dollar, and it has higher unemployment, then it would have to respond, and that would either be by increasing domestic demand or by weakening its own currency.
Stronger productivity growth would tend to raise the average level of interest rates and, therefore, would provide the Federal Reserve with greater scope to ease monetary policy in the event of a recession.
In my view, nothing would do more to reduce violence in American cities than genuine full employment - a job at a decent wage for every person who wants to work. Numerous studies have shown that violence increases with unemployment.
The basic prescription for preventing deflation is therefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending, in a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place.
Audit the Fed is a bill that would politicize monetary policy, would bring short-term political pressures to bear on the Fed. In terms of openness about our financial accounts, we are extensively audited.
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