Title: Money Growth Rule
|Date:||January 12, 2015|
|Length:||3 / 765|
|No of views:||0|
|Essay rating:||good 0, average 0, bad 0 (total score: 0)|
The reasoning is that as the economy experiences changes in relative output, the money supply can have dramatic effects upon the economy. Additionally, by establishing a money growth rule, Friedman believed that this would eliminate the possibility of short-run mismanagement and, in the end, be more beneficial for the economy...
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Establishing a constant growth level in the money supply would eliminate the decision making process of the central banker. The problem with human intervention is the short-sided nature of many of the policies designed to aid the economy. Such interventions, which yields unintended negative consequences, is the result of the time inconsistency problem...
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