Friedman's words are often cited as gospel. He is correct that increases
in the money supply validate inflation but I don't think that it is the
cause. For example prices fell in the late 19th C. because of
competition, not a smaller money supply. As firms consolidated, prices
began to rise. New gold discoveries might have helped, but only helped.
Brad DeLong wrote:
> >Brad, quoting the bible written by that charlatan Milton Friedman
> >doesn't prove a thing. It's the logical fallacy of appeal to
> >authority -- or to appeal to a slogan that has captured the minds of
> >the orthodox school of economics.
>
> I didn't quote Friedman, who said "inflation is always and everywhere
> a monetary phenomenon." I misquoted him, saying "hyperinflation is
> always and everywhere a monetary phenomenon."
>
> I think that the first is false, and the second is true...
>
> Brad DeLong
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
