Comment on Money, Credit and Interest Rates in the Business Cycle

Near the start of his paper, Benjamin Friedman writes: "The basic theme of this paper ... is that the quantitative relationships connecting monetary and financial variables to the business cycle exhibit few if any strongly persistent regularities which have remained even approximately invariant in the context of the widespread and, in some instances, dramatic changes undergone by the U.S. financial markets...", (p. 2). In the conclusion, he repeats this theme: "[EJconomic fluctuations exhibit few quantitative regularities that have persisted unchanged across spans of time in which the nation's financial markets have undergone profound and far reaching changes." (p. 40). And he warns us not to accept "the appearance of simple and eternal verities in much of the previous literature of monetary and financial aspects of business fluctuations" (p. 33).