Since its publication in 1963, Milton Friedman and Anna Jacobson Schwartz’s A Monetary History of the United States has stood as a monumental scholarly accomplishment. Even critics of Friedman’s Monetarism have admired the work’s meticulous historical research, particularly its reconstruction of a data series on several measures of…
The familiar chart below illustrates the depth of the decline in real output during the 2007-09 Great Recession (the shaded period), and the failure of the recovery to return real output to its “potential” path (in other words, to eliminate the estimated “output gap”) during the subsequent…
Changes in the general level of prices are capable, as we've seen, of eliminating shortages or surpluses of money, by adding to or subtracting from the purchasing power of existing money holdings. But because such changes place an extra burden on the price system, increasing the likelihood…