Variations in the money supply can lead to booms and busts in the economy from "summary" of A Monetary History of the United States, 1867-1960 by Milton Friedman,Anna Jacobson Schwartz
The relationship between the money supply and economic booms and busts is a crucial aspect of understanding the fluctuations in the economy. Changes in the money supply can have significant effects on economic activity, leading to periods of expansion and contraction. When the money supply increases, it can fuel economic growth by providing consumers and businesses with more funds to spend and invest. This increased spending can lead to higher levels of production, job creation, and overall economic prosperity. Conversely, a decrease in the money supply can have the opposite effect, causing a contraction in economic activity. When there is less money available for spending and investment, consumers and businesses may cut back on their purchases and projects, leading to a slowdown in production, job losses, and a decline in overall economic performance. These fluctuations in economic activity can result in booms and busts, as periods of rapid expansion are often followed by periods of contr...
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