| Friedman's arguments restes on three features: |
| 1. The Fed cannot control the money supply well. |
| 2. The effect of changes in the money supply have long
and variable lags, with uncertain magnitudes |
| 3. The Fed is not very good at forecasting. |
| 4. Changes in the money supply have large impacts on
the economy. |
| Consequently, the Fed frequently gets the timing and
magnitude of its policy interventions wrong, and destabilizes the economy
more often than it stabilizes it. Friedman argued that the Fed should be
stopped from doing this. |