Monetary Policy and Inflation

Inflation does not stimulate sustainable growth; it just creates a temporary illusion of it. Real growth requires that competition do its work both at home and abroad. Com petition must be allowed to produce the kind of flexible change that brings out the maximum use of resources and does not allow inefficiency to hide behind the shelter of monopoly or other forms of protection. Rapid growth requires use of the most advanced technology. That which is inefficient and out moded must be abandoned quickly. To employ some form of protection merely to preserve the status quo, whether through subsidies, tariffs, or featherbedding, tends to retard growth. The problems of monetary policy are the problems of a society organized around the principles of free markets and freedom of choice. In an economy where freedom is exercised by indi viduals and by business units, effective regulation of the money system is of prime importance. In brief, the problems that are the concern of monetary policy in a free society are those which flow from the exercise of freedom in the use of money. Mone tary policy cannot be successfully managed by formula because it must be adapted to the variety of our economy and to its changing moods.