Money Matters

November 1975
National Review;11/7/1975, Vol. 27 Issue 43, p1223
The article discusses the relationship between money supply and inflation. Economists have argued that the trend of the rate of increase in the money supply over a sustained period to a great extent determines the general trend of inflation. A study by economist Michael Levy of the Conference Board, a business research organization, claims that monetarism overrates the short-term influence of money growth on inflation. Levy's version of a monetarist equation shows inflation at 5.9 percent in the first quarter of 1976 with a 5 percent rate of growth in the money supply, and 5 percent inflation with a 10 percent rate of growth.


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