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Hello Michael, 
 
There is little more that I can say except in response to your last 
comments about the ECB. It seems to me that the ECB follows pretty closely 
the newer inflation targeting work of Bernanke, Mishkin, et al, rather than 
monetarism, per se. I would certainly agree that this newer literature has 
a part of its origin in "old Chicago monetarism", at least to the extent 
that it is explicitly based on the assumption that in the long run all 
monetary policy can do is affect the price level. But it is also different 
than monetarism in many important ways. I bring this point up not to defend 
the ECB, but rather to share my reflection that to understand the ECB's 
current policy position one might well start by thinking about Friedman's 
influence, but that we would also want to work through carefully the nature 
of the emergence of an alternative school of monetary economics (the 
inflation targeters), what they advocate, how they developed their current 
authority, how their ideas changed and evolved as they were tried first in 
New Zealand, and then around the world, and how the economic conditions of 
the last 2 decades serve as a backdrop to their emergence. While Friedman 
is still a giant in the public mind, there are many other factors at work, 
I suspect, in the ECB's current policy stance than just Friedman's 
monetarism. 
 
Perhaps what we need now is an international study group on the rise and 
fall of monetarism? There are many important questions and issues that 
simply have not been asked, much less answered. 
 
Best, 
Brad 
 
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