March 17, 2010 Reading Time: < 1 minute

“Some economic phenomena can result from a variety of causes. A temporary increase in unemployment, for example, might be caused by a sudden, disruptive change in production technology, or in trade patterns, or in labor or tax laws; or it could be caused by natural disasters or wars, or by recessions due to monetary or fiscal policy. In such cases the exact cause is unclear.

By contrast, a few economic phenomena have one and only one root origin; when we see the effect, we can be sure of the cause. One of these is inflation. Its root cause is a settled matter for most economists. In the words of the great Milton Friedman, whose masterwork with Anna Schwartz, A Monetary History of the United States, did a lot to settle the matter, ‘Inflation is always and everywhere a monetary phenomenon.’” Read more.

“Something Besides Money Growth Causes Inflation?”
Howard Baetjer, Jr.
The Freeman, July 2007, Vol. 57, Issue 6
Via the Foundation for Economic Education.

Tom Duncan

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