Inflation Is Not Caused by Higher Prices
6 January 2007
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Reporting on economist George Akerlof's efforts to make economics more "realistic" than it was under the influence of the late Milton Friedman, Louis Uchitelle mistakenly attributes to Mr. Friedman the view that workers' "pressure for higher pay" fuels inflation ("Encouraging More Reality in Economics," Jan. 6).
Mr. Friedman vigorously and famously rejected the notion that rising costs - including rising labor costs - cause inflation. Indeed, one of his most memorable phrases is that "inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output."
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Reporting on economist George Akerlof's efforts to make economics more "realistic" than it was under the influence of the late Milton Friedman, Louis Uchitelle mistakenly attributes to Mr. Friedman the view that workers' "pressure for higher pay" fuels inflation ("Encouraging More Reality in Economics," Jan. 6).
Mr. Friedman vigorously and famously rejected the notion that rising costs - including rising labor costs - cause inflation. Indeed, one of his most memorable phrases is that "inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output."
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Monday September 17, 2007 at 5:53pm