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Quote by Milton Friedman

“When they so-called 'target the interest rate', what they're doing is controlling the money supply via the interest rate. The interest rate is only an intermediary instrument.”

Author

Milton Friedman

Milton Friedman was a renowned economist known for his contributions to the field of free-market economics. His research in monetary economics, consumer behavior, and tax policy has had a profound impact. more

“There's only one thing that all of the central banks control and that is the base, their own liability, and they can control that in various ways. They can control it directly by open market operations, buying and selling government securities or other assets, for example, buying and selling gold, or they can control it indirectly by altering the rate at which banks lend to one another.”

Way Government One Thing Security Example Gold Rate Various Selling Operations Buying Assets Liability Central Banks Buying And Selling

Author:Milton Friedman

“The central banks cannot control interest rates. That's a mistake. They can control a particular rate, such as the Federal Funds rate, if they want to, but they can't control interest rates.”

Ifs Want Interest Mistake Particular Rate Fund Interest Rate Central Banks

Author:Milton Friedman

“What central banks can control is a base and one way they can control the base is via manipulating a particular interest rate, such as a Federal Funds rate, the overnight rate at which banks lend to one another. But they use that control to control what happens to the quantity of money. There is no disagreement.”

Way Use Happens Interest Particular Rate One Way Fund Quantity Disagreement Interest Rate Central Banks

Author:Milton Friedman

“No central banker would disagree with the proposition that inflation is primarily a monetary phenomenon. Not one of them will disagree that every inflation has been accompanied by a rapid increase in the quantity of money and every deflation by a decline in the quantity of money.”

Has Beens Increase Phenomenon Disagree Quantity Decline Propositions Inflation Rapids Bankers Monetary Deflation

Author:Milton Friedman