To implement the Friedman rule for long-term monetary policy,the monetary authority would need to set the

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The Friedman rule suggests that the nominal rate of interest should be set at zero in order to achieve long-term monetary policy objectives. This would require the central bank to adjust the money supply to maintain a zero nominal interest rate, which would in turn create a situation where the real interest rate equals the negative of the expected inflation rate. By setting the nominal interest rate to zero, the central bank can ensure that the economy operates at its full potential output level, without the distortionary effects of inflation or deflation.

To Implement the Friedman Rule for Long-Term Monetary Policy,the Monetary