Definition
According to Friedman, "The stock of money increased at a fixed rate year-in and year-out without any variation in the rate of increase to meet cyclical needs" (Friedman, 1960). Friedman was of the view that the main policy to be avoided is countercyclical monetary policy, the standard Keynesian policy recommendation at the time. He believed giving governments any flexibility in setting money growth would lead to inflation and therefore, the central bank should follow a procyclical monetary policy and expand the money supply at a constant rate, equivalent to the rate of growth of real GDP.
Read more about this topic: Friedman's K-percent Rule
Famous quotes containing the word definition:
“Was man made stupid to see his own stupidity?
Is God by definition indifferent, beyond us all?
Is the eternal truth man’s fighting soul
Wherein the Beast ravens in its own avidity?”
—Richard Eberhart (b. 1904)
“Beauty, like all other qualities presented to human experience, is relative; and the definition of it becomes unmeaning and useless in proportion to its abstractness. To define beauty not in the most abstract, but in the most concrete terms possible, not to find a universal formula for it, but the formula which expresses most adequately this or that special manifestation of it, is the aim of the true student of aesthetics.”
—Walter Pater (1839–1894)
“It is very hard to give a just definition of love. The most we can say of it is this: that in the soul, it is a desire to rule; in the spirit, it is a sympathy; and in the body, it is but a hidden and subtle desire to possess—after many mysteries—what one loves.”
—François, Duc De La Rochefoucauld (1613–1680)