Always and Everywhere

ALWAYS AND EVERYWHERE….In the Guardian, Richard Adams writes a critique of Milton Friedman that includes this:

In terms of the policies he inspired or influenced, however, the report card is not so glowing. His great claim, the idea that “inflation is always and everywhere a monetary phenomenon” may have set off the Monetarist versus Keynesian “econ-wars” of the late 1970s and 1980s. But Friedman’s ideas of directly targeting the money supply were tried and rejected as a failure, in both the UK and the US, and Friedman himself backed away from his dogmatic earlier positions. Today, no major central bank directly targets money supply data in setting monetary policy.

That’s true. “Long and variable lags” combined with technical difficulties in meeting money supply targets pretty much doomed pure monetarism. Or so I understand, anyway.

But I’m more curious about Friedman’s famous conclusion that “inflation is always and everywhere a monetary phenomenon.” Is it? I was influenced a few years ago by David Hackett Fischer’s The Great Wave to suspect that Friedman was wrong about that, but I haven’t read any further on the subject and I don’t have the economic chops to draw any conclusions on my own. What’s more, as with all interesting economic questions, I suppose the correct answer is “opinions differ.”

Still, since that sentence is one of ? if not the ? most famous thing Friedman said, surely it deserves a bit of discussion upon his death? Or is it too old hat to merit any further interest? DeLong? Mankiw? Sawicky? Cowen? Thoma? What do you say?

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