Fed use this power? Since the 1950s, so-called monetarist, led by the University of Chicago's Milton Friedman, have persistently argued that the Federal Reserve, instead of making monetary policy, should follow a simple monetary rule. The essence of that rule is that discretionary policy on the part of the Fed actually makes the economy less stable. Friedman and others have argued that if the Federal Reserve would simply ensure that the money supply grows at a steady rate, say 4% per year, the economy would also grown steadily and without inflation (Friedman, 1959, 1980)
Another policy option has been articulated over the years by essayists at the Wall Street Journal and other conservative publications. This position maintains th
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