“K-Percent Rule. Under this rule, proposed by Milton Friedman in 1960, the Federal Reserve would create money at a fixed rate—say 3 percent per year. By offering the inflation benefits of gold without the potential disruption to the financial system, a K-Percent Rule could be a more politically viable alternative to gold.”
Citation: Project 2025, Section 4.4: Federal Reserve, Paul Winfree, page 770, paragraph 5
Context:
This is the third of a number of proposals Winfree suggests for limiting the power of the Federal Reserve’s role, in the absence of abolishing it entirely (in decreasing order of preference/effectiveness.)
The K-percent rule refers to a monetary policy framework where the central bank increases the money supply at a fixed percentage rate (K) annually, regardless of current economic conditions or other factors.
For the pros and cons of the K-percent rule, see the analysis below.
Full contextual analysis of Section 4.4: Federal Reserve here.
Section: Section 4.4: Federal Reserve