Welcome. This is Anastasia Yuglova bringing you the Cato Daily Podcast.

Be sure to log on to our website www. Cato.org for a full archive of our

podcast as well as many other audio offerings.

The Kido Institute's 24th annual monetary conference last Thursday coincided with the

sad passing of a giant in monetary policy, economist and Noble Laureate Milton Friedman.

In today's podcast, I speak with another influential economist,

Professor Robert Barrow of Harvard University,

who delivered the closing address at the conference entitled Milton Friedman perspectives,

particularly on monetary policy.

Professor Barrow, what is your opinion on the proper role for Central Banks?

I think the best thing that they can do is to main something close to price stability interpreted

in terms of low and stable inflation and not really try to doctor the business cycle very much,

not try to fine-tune the economy because that's what can

lead them into trouble and used to do so before the early 1980s in particular.

There's been tremendous success along these lines really since the early to mid 1980s that Central Banks across the world

not just in the US have pretty much become committed to low and stable

inflation. This has been a great triumph and it's not been at the expense of real

economic growth or unemployment.

So this is actually working very effectively.

With the economy going as strong as it is, are we looking at a potential hike in interest rates?

Well, it depends particularly on two things. One, what happens to

inflation and the second thing especially what happens to the real economy but

...