Money Growth Rule
The Money Growth Rule is based upon a theory originally set forth by Milton Friedman as a solution to keep the United States economy on a controlled course of growth. The thoery revolves around the premise that the best monetary policy that the Federal Reserve can follow is to establish a constant growth rate of the money supply independent of current economic fluctuations. The reasoning is that as the economy experiences changes in relative output, the money supply can have dramatic effects upon the economy. Additionally, by establishing a money growth rule, Friedman believed that this would eliminate the possibility of short-run mismanagement and, in the end, be more beneficial for the economy.
The problem with balancing an economy is that human judgment and evaluation of economic situations enter into the equation. Establishing a constant growth level in the money supply would eliminate the decision making process of the central banker. The problem with......

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Title: Money Growth Rule
Approximate Word Count: 792
Approximate Pages: 4 (250 words per double-spaced page)

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