Response to Friedman

2 Pages Posted: 24 Aug 2012

Date Written: 1983


Professor Friedman restates his three reasons for adding credit to the list of intermediate targets for monetary policy: (1) policymakers should broaden their sources of information to include observations on both the asset and liability sides of the public’s balance sheet; (2) the domestic nonfinancial credit aggregate (DNF) bears as close a relationship to nonfinancial economic activity as does any conventional monetary aggregate; and (3) ultimately this credit measure can be controlled by the Federal Reserve with about as much precision as any conventional monetary aggregate. In our response to Friedman we will focus on the second point since it is the major theme of our paper.

Suggested Citation

Porter, Richard D. and Offenbacher, Akiva (Edward), Response to Friedman (1983). FRB Richmond Economic Review, Vol. 69, No. 6, November/December 1983, pp. 34-35, Available at SSRN:

Richard D. Porter (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

Akiva (Edward) Offenbacher

Bank of Israel

P.O. Box 780
Jerusalem, 91907

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