When monetary policy can not be neutral, it can be the main variable for price and product too
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Economics says the effect of monetary policy is only inflation So we have to wait for supply and demand to increase per capita income and supply and demand to reduce inflation! There was something wrong with Friedman’s analysis By applying an example of a monetary policy that sought to reduce interest rates There was an increase in demand for raw materials Not an increase in demand for final goods And if the monetary policy given to producers was free The final cost of the producers did not increase While increasing the price of raw materials. So inflation did not form As production improved (through the nature of proper support). The story of free monetary policy does not end here. If this policy is defined as sustainable In general, the same increase in raw material prices will not occur Because proper and lasting protection replaces the market law in the production market and consequently in the product market.
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Wednesday, 28 January , 2026