The Role of Monetary Policy.¶
Friedman, M. (1968). The Role of Monetary Policy. American Economic Review, 58(1), 1-17.
Cited by¶
3 citations across 3 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Crowding Out
- Public spending displacing private investment looks like spending displacing investment "despite there being more activity," because the substrate — the pool of loanable funds and the interest rate that clears it — is the unattended channel.
This sourcePresidential address framing how government action operates through the interest-rate channel; supports the displacement-through-an-unattended-channel point.
- Public spending displacing private investment looks like spending displacing investment "despite there being more activity," because the substrate — the pool of loanable funds and the interest rate that clears it — is the unattended channel.
- Irreducible Floor
- Labour economics: the natural rate of unemployment (NAIRU) — the rate below which monetary expansion does not reduce unemployment further but does generate inflation; the floor is structural (matching frictions, sectoral mismatch, search costs) and monetary policy is the intra-regime lever.
This sourceIntroduces the natural rate of unemployment: a structural floor set by labor-market frictions below which monetary expansion generates inflation rather than lower unemployment.
- Labour economics: the natural rate of unemployment (NAIRU) — the rate below which monetary expansion does not reduce unemployment further but does generate inflation; the floor is structural (matching frictions, sectoral mismatch, search costs) and monetary policy is the intra-regime lever.
- Latency
- Because policy acts on the economy with long and variable lags, policymakers are perpetually steering by a delayed image of conditions, a structural reason monetary policy tends to overshoot.
This sourcePresidential address establishing that monetary policy acts on the economy with long and variable lags, so policymakers steer on a delayed image of conditions, a structural source of overshoot.
- Because policy acts on the economy with long and variable lags, policymakers are perpetually steering by a delayed image of conditions, a structural reason monetary policy tends to overshoot.
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