Αρχική Σελίδα Αρχική Σελίδα
  Rss Feeds

IN OLD CHICAGO: SIMONS, FRIEDMAN

AND THE DEVELOPMENT OF MONETARY-POLICY RULES

 

George S. Tavlas

 

Abstract

This paper examines the different policy rules proposed by Henry Simons, who, beginning in the mid-1930s, advocated a price-level stabilization rule, and by Milton Friedman, who, beginning in the late-1950s, advocated a rule that targeted a constant growth rate of the money supply. Although both rules shared the objective of eliminating the policy uncertainty emanating from discretion, they differed because of the different views of Simons and Friedman about the stability of secular relationships. Simons' rule relates to modern rules which emphasize the pursuit of price stability as representing optimal monetary policy.

 

Keywords: Milton Friedman, Henry Simons, monetary-policy rules

JEL classifications: B22, E52

Acknowledgements: I thank Harris Dellas, Paul Evans, Bob Hetzel, Thomas Humphrey, Ed Nelson, John Taylor, Athanasios Orphanides, and Michael Ulan for helpful comments. I am grateful to Dan Hammond for providing me with unpublished documents written by Milton Friedman having to do with the beginning of Friedman’s collaboration with Anna Schwartz. The views expressed are those of the author

 

 

 

Correspondence:

George S. Tavlas

Member, Monetary Policy Council

Bank of Greece

21, El. Venizelos Avenue

102 50 Athens, Greece

tel.  + 30 210 3202370

fax. + 30 210 320 2432

e-mail. gtavlas@bankofgreece.gr


Πλήρες Κείμενο