A review of the connection between labor resource utilization and the growth/unemployment correlation summarized by Okun's law, showing that the instability of that relationship, particularly over short time horizons, has important implications for monetary policy.

In their efforts to maintain low inflation, policymakers pay little attention to the growth rate of the money supply. Yet many studies have found that money growth and inflation a closely related, at least in the long run. But how long must money growth remain strong before it begins to concern...