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often been highly variable, no less an authority than Fedral Reserve Chairman Alan Greenspan has indicated
that Friedman’s emphasis on a stable monetary framework was instrumental in guiding central banks in Europe
and the U.S. toward low inflation during the pass two decades.
Before Friedman, economic conventional wisdom held that inflation reduces unemployment because prices rise
faster than labor costs. In the late 1960s, Friedman argued instead that there is no permanent reduction in
unemployment from continuing inflation because wages eventually catch up to prices as expectations about
inflation become more accurate. His analysis has been validated twice since then----by the high U.S. the ’90
even though inflation was negligible.
Two decades before Chile introduces its revolutionary private individual account retirement system, Friedman’s
classic 1962 book Capitalism and Freedom criticized the prevailing pay-as-you -go Social Security systems for
restricting the ability of individuals to choose how much and in what form to save for retirement, and for mixing
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