“History has shown that monetary stability—money growth consistent with a stable and predictable value of money—is an important determinant of economic stability. Safeguarding the long-run purchasing power of money is also essential for the future of private property and a free society. In the United States, persistent inflation has eroded the value of money and distorted relative prices, making production and investment decisions more uncertain.
In the early 1970s, wage-price controlswere imposed—ostensibly aimed at reducing inflationary expectations. Those controls only repressed inflation as money growth accelerated. When the controls were lifted, the excess supply of money became evident. Meanwhile, the controls reduced economic freedom and increased government discretion, thus undermining the rule of law.” Read more.
“The Limits of Monetary Policy”
Chapter 20, Cato Handbook for Congress: Policy Recommendations for the 108th Congress, (2003).
Via the Cato Institute.
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