The origin story of Friedman’s “long and variable lag”

Marketplace

News, Business

4.6 • 8.6K Ratings

🗓️ 24 July 2023

⏱️ 28 minutes

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Summary

Popularized by Milton Friedman in the 1960s, the phrase “long and variable lag” refers to the idea that it takes time for monetary policy to be felt in the economy, and the Federal Reserve uses it a lot. How did it go from concept to conventional wisdom? Today, part one of our answer. We’ll also outline a big week ahead for the world’s central banks and the ripple effects of a potential UPS strike.

Transcript

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0:00.0	Hey everybody, it's Kai.
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0:18.6	to donate your car today.
0:20.8	All right, quick.
0:23.0	What is J. Powell thinking?
0:26.8	Yes, we have come to a Fed meeting week again.
0:31.4	From American public media, this is Marketplace.
0:35.8	In Los Angeles, I'm Kai, Rizdole.
0:46.4	It is Monday.
0:47.7	Today, this one's the 24th day of July.
0:50.2	It is always to have you along.
0:52.0	Everybody, the Fed meeting of which we speak is, of course,
0:55.4	the federal open market committee, the group within the central bank that sets interest rates.
1:00.2	Tomorrow and Wednesday are blocked off on the calendars of J. Powell and the gang as they
1:04.1	discuss the price of money in this economy.
1:07.8	It is something of a central bank of Paloza this week.
	...

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