Question
Should full discretion over money supply growth be taken away from the Federal Reserve Bank, and the Fed be required to expand the money supply
Should full discretion over money supply growth be taken away from the Federal Reserve Bank, and the Fed be required to expand the money supply no faster than the rate of increase in productivity (output per person hour)? You could not do this on a monthly or yearly basis because business cycles last too long, but you could benchmark the money supply on a five-year basis, say, and require that expansions cease if money supply growth is running more than x% ahead of real growth, and resume only when the benchmark ratio of money to real goods has been achieved again. Would you agree to legislation of this type, that took power away from the Federal Reserve Bank? Why do you find this attractive or unattractive?
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