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Investopedia explains 'K-Percent Rule'
Milton Friedman is the godfather of monetarism, a branch of economics that singles out monetary growth and related policies as the most important driver of future inflation. While the U.S. Federal Reserve Board is well-versed on the k-percent rule’s merits, in practice most advanced economies do in fact base their monetary growth decisions on the state of the broad economy.
When the economy is cyclically weak, the Federal Reserve and others may look to grow the money supply by more than what the k-percent rule would suggest. Conversely, when the economy is performing well, most central banking authorities will seek to constrain money-supply growth.
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