AS NOTED ECONOMIST ALLAN MELTZER HAS OBSERVED, “MOST WORKING ECONOMISTS, MOST
CENTRAL BANK STAFFS, AND MARKET PRACTITIONERS DO NOT USE MONEY GROWTH TO PREDICT
INFLATION. MANY RELY ON THE PHILLIPS’ CURVE OR ATHEORETICAL RELATIONS”
(MELTZER 1998, 25).1 THERE IS SUBSTANTIAL SUPPORT FOR MELTZER’S CLAIM. FOR
EXAMPLE, FREDERIC MISHKIN, AN ECONOMICS PROFESSOR AND A FORMER DIRECTOR OF RESEARCH AT THE
FEDERAL RESERVE BANK OF NEW YORK, HAS BEEN QUOTED AS SAYING, “THE AMOUNT OF INFORMATION
IN THE MONETARY AGGREGATES IS ESSENTIALLY ZERO” (MANDEL 1999). RELIANCE ON THE PHILLIPS
CURVE OR ATHEORETICAL RELATIONS IS NOT UNIVERSAL, THOUGH. FOR INSTANCE, THE ECONOMIST SUGGESTS
THAT “THE FED WOULD BE FOOLISH TO IGNORE RAPID MONEY GROWTH COMPLETELY” (“FOLLOW
THE MONEY” 1998, 68) IN ITS POLICY DELIBERATIONS.