The Optimum Quantity of Money

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Financial
Economic systems
The Optimum Quantity of Money

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The optimum quantity of money is a normative monetary policy conclusion drawn from the long-run properties of a theoretical model. Most famously associated with Milton Friedman, the optimum calls for a zero nominal rate of interest and thus a steady state of price deflation at the long-run real rate of interest. Although this policy prescription has played a minor role in monetary policy implementation, it has had an enormous influence in monetary theory.

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