Milton Friedman has been dead for two decades, but his ideas just got a second wind. Stephen Miran, the former Federal Reserve Governor who served from September 2025 to January 2026, has co-authored a research paper arguing that the Fed should pay far more attention to money supply data when making policy decisions.
The paper, titled “A return to monetarism?” and published in July 2026, was written alongside economists Peter Ireland and Nouriel Roubini.
What the paper actually says
The core argument is deceptively simple. Monetary aggregates, think M2 money supply and more sophisticated Divisia measures, are better predictors of inflation and economic growth than the Fed has been willing to admit for the past several decades.
The paper stops short of calling for a full return to money-supply targeting, the rigid approach Friedman championed and the Fed briefly tried in the early 1980s under Paul Volcker. Instead, it advocates for monetary aggregates to play a “significant role” in policy decisions alongside existing tools.
