〓 During episodes of cost-push inflation, monetary tightening is often implemented in order to prevent excessive growth of the money stock.
〓 At first glance, such policies may appear consistent with Milton Friedman's Monetarism Mark I. In reality, however, there are cases such as 2022, when large-scale yen carry trades engineered by Wall Street speculators caused Federal Reserve rate hikes to induce additional monetary expansion in the United States through the inflow of yen-funded investment capital, thereby accelerating inflation rather than containing it.
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However, to say that:
«This is Milton Friedman's Monetarism Mark I itself»
would place the argument at some distance from Friedman's actual theory.
Friedman was less concerned with "restoring real wages through wage increases" than with:
«Stabilizing the money supply in order to control inflation expectations.»
https://gyazo.com/0cb9f56911e0ab413284f51d07c434ed
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Comment
〓 During episodes of cost-push inflation, monetary tightening is often implemented in order to prevent excessive growth of the money stock.
〓 At first glance, such policies may appear consistent with Milton Friedman's Monetarism Mark I. In reality, however, there are cases such as 2022, when large-scale yen carry trades engineered by Wall Street speculators caused Federal Reserve rate hikes to induce additional monetary expansion in the United States through the inflow of yen-funded investment capital, thereby accelerating inflation rather than containing it.