THE HAYEK RULE — A NEW MONETARY FRAMEWORK

“The Hayek Rule: A New Monetary Policy Framework for the 21st Century”, (pdf) by Marius Gustavson and Anthony Randazzo Nov. 9, 2010.  Quotable:

“We propose a new policy framework for monetary policy, one that looks at monetary aggregates and factors in the connections between monetary policy and asset prices. Our proposed “Hayek rule” is a symmetrical approach that seeks to stabilize nominal income, in both good and bad times,
through a system in which the annual flow of money—what we will refer to as the “circulatingmedium of exchange,” which is equal to nominal spending (MV)—remains at a constant level.”

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[Legal positivism, act utilitarianism, and socialism] are false, not because of the values on which they are based, but because of a misconception of the forces which have made the Great Society and civilization possible. — F. A. Hayek

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