"Inflation tends not only to be higher but also increasingly volatile and to be accompanied by widening government intervention into the setting of prices. The growing volatility of inflation and the growing departure of relative prices from the values that market forces alone would set combine to render the economic system less efficient, to introduce frictions in all markets, and, very likely, to raise the recorded rate of unemployment."

"The length and depth of the deflation during the late 1920s and early 1930s strongly suggest a monetary origin, and the close correspondence (across both space and time) between deflation and nations' adherence to the gold standard shows the power of that system to transmit contractionary monetary shocks. There is also a high correlation in the data between deflation (falling prices) and depression (falling output), as the previous authors have noted and as we will demonstrate again below."

“The chief attraction the issuer of a competitive currency has to offer to his customers is the assurance that its value will be kept stable (or otherwise be made to behave in a predictable manner).”

"I know of only one part of economics in which transaction costs have been used to explain a major feature of the economic system and that relates to the evolution and use of money. Adam Smith pointed out the hindrances to commerce that would arise in an economic system in which there was a division of labour but in which all exchange had to take the form of barter. No-one would be able to buy anything unless he possessed something that the producer wanted. This difficulty, he explained, could be overcome by the use of money."

"The overall object of the exercise essentially comes down to this: for each abstract description of a transaction, identify the most economical governance structure--where by governance structure I refer to the institutional framework within which the integrity of a transaction is decided. Markets and hierarchies are two of the main alternatives."

“Policy options must remain within the realm of the feasible, and the interests of political agents must be recognized as constraints on the possible.”

“Finally, it may be possible to create systems in which rational self-interest, due to a variety of rewards and punishments, leads, or may lead, to legal and ethical behavior. The validity of Samuelson’s second conjecture (that is, that there may be no successful implementation for public goods under decentralization) remains, in my opinion, an open question. The example of voters removing a corrupt official from office suggests that successful decentralization is possible.”

“…I think the key element, breakthrough, that I thought for myself that I was making was in the seeing the economy as determined by a combination of two basic macro economic conditions. One is equilibrium in the goods and services market, and equilibrium in the foreign exchange market.”