Working Papers

What Would Friedman Do? Support Ben Bernanke

David Beckworth and William Ruger argue that Friedman would support Ben Bernanke. I often point to this op-ed, in which Friedman argued in favour of quantitative easing for Japan in the late 1990s in circumstances not unlike those in the US today. While I doubt Friedman would see quantitative easing as a panacea (it certainly wasn’t for Japan from 2001-2006), he would surely argue that monetary policy should be as accommodating as possible.

In the classical liberal circles in which I travel, mindless criticism of quantitative easing is all too common, but this only highlights the lack of knowledge of the classical liberal tradition in monetary economics among many people who should know better.

posted on 22 October 2010 by skirchner in Economics, Monetary Policy

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