The first edition was published in 1956 and became very well known, but was also criticized, particularly about the dynamics of prices in response to changes in the money stock. The second edition, published in 1965, responded to this and other critiques, and achieved the goal set out in the book’s subtitle. In Note M of MIP (pp.
As a monetary policy-maker, I am convinced that these measures were necessary to prevent the financial crisis from having further adverse consequences on both the financial system and on the macro economy and therefore, ultimately, on medium term price stability. A freezing-up of the interbank market could have caused a credit crunch and a downward spiral in asset prices.