Changes in the money supply can have profound effects on economic activity from "summary" of A Monetary History of the United States, 1867-1960 by Milton Friedman,Anna Jacobson Schwartz
The relationship between changes in the money supply and economic activity is a fundamental concept in understanding the dynamics of an economy. As we delve into the historical data and empirical evidence presented in the book, it becomes evident that fluctuations in the money supply have a significant impact on economic outcomes. By meticulously analyzing the monetary history of the United States from 1867 to 1960, Friedman and Schwartz demonstrate how changes in the money stock can lead to fluctuations in aggregate demand, investment, consumption, and ultimately, economic growth. The authors highlight how variations in the money supply can either stimulate or dampen economic activity depending on the prevailing economic conditions. One key insight that emerges from their analysis i...
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