Editing Monetarism (section)

===Monetary history of the United States===

[[File:Money_supply_during_the_great_depression_era.png|400px|thumb|right| Money supply decreased significantly between [[Black Tuesday]] and the [[Emergency Banking Act|Bank Holiday in March 1933]] in the wake of massive [[bank runs]] across the United States.]]
Monetarists argued that central banks sometimes caused major unexpected fluctuations in the money supply. Friedman asserted that actively trying to stabilize demand through monetary policy changes can have negative unintended consequences.<ref name=Blanchard>{{cite book |last1=Blanchard |first1=Olivier |last2=Amighini |first2=Alessia |last3=Giavazzi |first3=Francesco |title=Macroeconomics: a European perspective |date=2017 |publisher=Pearson |isbn=978-1-292-08567-8 |edition=3rd}}</ref>{{rp|511-512}} In part he based this view on the historical analysis of monetary policy, ''[[A Monetary History of the United States|A Monetary History of the United States, 1867–1960]]'', which he coauthored with [[Anna Schwartz]] in 1963. The book attributed inflation to excess money supply generated by a central bank. It attributed deflationary spirals to the reverse effect of a failure of a central bank to support the [[money supply]] during a [[Market liquidity|liquidity]] crunch.<ref>{{cite book|first=Michael D.|last=Bordo|date=1989|title=Money, History, & International Finance: Essays in Honor of Anna J. Schwartz|chapter=The Contribution of ''A Monetury History''|page=[https://archive.org/details/moneyhistoryinte0000unse/page/46 46]|department=The Increase in Reserve Requirements, 1936-37|isbn=0-226-06593-6|publisher=University of Chicago Press|access-date=2019-07-25|chapter-url=https://archive.org/details/moneyhistoryinte0000unse/page/46|citeseerx=10.1.1.736.9649}}</ref> In particular, the authors argued that the [[Great Depression]] of the 1930s was caused by a massive contraction of the money supply (they deemed it "the [[Great Contraction]]"<ref name=FriedmanSchwartz>{{cite book|author1=Milton Friedman|author2=Anna Schwartz|title=The Great Contraction, 1929–1933|url= https://books.google.com/books?id=-lCArZfazBkC&q=%22Regarding%20the%20Great%20Depression%20You're%20right%20We%20did%20it%22|year=2008|publisher=Princeton University Press|isbn=978-0-691-13794-0|edition=New}}</ref>), and not by the lack of investment that Keynes had argued. They also maintained that post-war inflation was caused by an over-expansion of the money supply. They made famous the assertion of monetarism that "inflation is always and everywhere a monetary phenomenon."