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Why Is Stable Money Such a Big Deal?

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What do attempts to counterfeit an enemy’s currency during wartime have in common with decisions to adopt another country’s currency during peacetime? Both are inspired by the power of a stable monetary standard and, conversely, the consequences of losing it. Both illustrate why preserving the value of the nation’s currency is a central bank’s most important responsibility. This Commentary is based on a speech given (jointly with Mike Bryan) to the Cleveland City Club New Leaders group on February 19, 2002.

What do attempts to counterfeit an enemy’s currency during wartime have in common with decisions to adopt another country’s currency during peacetime? Both are inspired by the power of a stable monetary standard and, conversely, the consequences of losing it. Both illustrate why preserving the value of the nation’s currency is a central bank’s most important responsibility. This Commentary is based on a speech given (jointly with Mike Bryan) to the Cleveland City Club New Leaders group on February 19, 2002.


Suggested citation: Altig, David, 2002. "Why Is Stable Money Such a Big Deal?" Federal Reserve Bank of Cleveland, Economic Commentary, 05.01.2002.

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