The Zero-Rate Framework: Fulfilling Friedman's Monetary Vision

1. Introduction: Friedman's Practical Vision

Milton Friedman expressed a pragmatic aspiration for monetary design during a debate with Robert Mundell published in the National Post on December 16, 2000. In this discussion, Friedman contrasted his vision of a global monetary system with Mundell's, stating:

"I'm a utopian in the sense that I believe we should design a monetary system at the global level that eliminates the need for government intervention and provides stability."

This statement encapsulates Friedman's ultimate monetary objective – a system where stability emerges naturally from the monetary architecture rather than requiring continuous central bank management. Despite his significant contributions to monetary theory, including the "Friedman rule" for optimal monetary policy and his advocacy for rules over discretion, this practical vision remained unfulfilled during his lifetime.

Friedman's monetary contributions centered on two key insights: first, that inflation is "always and everywhere a monetary phenomenon," requiring control of monetary aggregates; and second, that discretionary policy creates more problems than it solves, necessitating rule-based approaches. Yet the mechanisms he proposed – a k-percent rule for money growth or steady deflation to achieve zero nominal interest rates – proved impractical in implementation.

This paper argues that the Zero-Rate Framework (ZRF), through its innovative combination of wealth taxation with financial claim exemptions, represents the evolutionary completion of Friedman's monetary vision. Where Friedman sought rules to constrain monetary authorities, the ZRF embeds those rules directly into the monetary architecture, creating automatic stabilizers that function without discretionary intervention. By achieving Friedman's optimal monetary policy (zero nominal interest rates) through mechanisms better suited to contemporary economic realities, the framework fulfills his aspiration for a stable monetary system requiring minimal government management.

Furthermore, the ZRF transcends the long-standing debate between Friedman and Mundell regarding fixed versus flexible exchange rates. Rather than choosing between national monetary sovereignty and international coordination, the framework demonstrates how properly designed monetary architecture can deliver both simultaneously, resolving what appeared to be an inevitable trade-off.

2. The Friedman Rule: Original Formulation and Limitations

2.1 Optimal Monetary Policy: Zero Nominal Interest Rates

In his seminal 1969 work, "The Optimum Quantity of Money," Friedman proposed what would become known as the "Friedman rule" – a policy setting nominal interest rates to zero. This proposal stemmed from his recognition that positive interest rates create an opportunity cost for holding money, leading economic actors to economize on cash balances below the socially optimal level. Since producing money costs essentially nothing at the margin, imposing an opportunity cost creates an unnecessary distortion. By setting nominal interest rates to zero, this inefficiency would be eliminated.

Friedman proposed achieving this zero nominal rate through steady deflation at a rate equal to the real interest rate. If the real interest rate was approximately 2%, creating a steady 2% deflation would yield zero nominal rates while maintaining the same real return. This would effectively compensate money holders through increased purchasing power rather than interest payments.

2.2 Implementation Challenges: The Deflation Problem

Despite its theoretical elegance, Friedman's implementation mechanism faced significant practical challenges. Engineering steady deflation proved extremely difficult without creating economic disruption. Historical episodes of deflation have typically been associated with economic contraction, financial stress, and increased debt burdens in real terms. The sticky nature of wages and prices, particularly downward, makes deflationary episodes particularly painful as adjustments occur primarily through output and employment rather than prices.

Furthermore, in a world of fiat currencies, central banks found inflation targeting more operationally feasible than deflation targeting. The zero lower bound on nominal interest rates created additional complications for monetary policy during economic downturns, as evident in the aftermath of the 2008 financial crisis.

2.3 The Velocity Challenge: Instability in the Equation of Exchange

A second fundamental challenge to Friedman's approach emerged from instability in monetary velocity – the rate at which money changes hands in the economy. Friedman's k-percent rule for money growth was predicated on a relatively stable velocity, allowing predictable relationships between money supply changes and nominal GDP. However, financial innovation, changing payment technologies, and economic shocks created significant and unpredictable fluctuations in velocity.

The equation of exchange (MV = PY, where M is money supply, V is velocity, P is price level, and Y is real output) highlights this challenge. Even with controlled money supply growth, unstable velocity creates unpredictable effects on nominal GDP, undermining the rule's effectiveness. This velocity instability has been particularly pronounced since the 1980s, coinciding with financial deregulation and technological change.

2.4 The International Dimension: Sovereignty vs. Coordination

Perhaps the most significant limitation of Friedman's original approach was inadequate attention to the international monetary dimension. While he advocated for flexible exchange rates to preserve domestic monetary sovereignty, this created tensions with international coordination. As globalization advanced, the spillover effects of national monetary policies became increasingly significant, creating challenges not fully addressed by Friedman's domestic focus.

The resulting system of flexible exchange rates among major currencies, while preserving national monetary autonomy, created substantial exchange rate volatility, currency speculation, and persistent global imbalances. These international complications reinforced the difficulty of implementing Friedman's optimal monetary policy within the existing framework.

3. The Mundell-Friedman Debate: Exchange Rate Regimes and Monetary Sovereignty

3.1 Mundell's Case for Fixed Exchange Rates

In direct opposition to Friedman, Robert Mundell championed fixed exchange rates and ultimately a world currency. His arguments centered on several key points:

1. Transaction cost reduction: Fixed rates eliminate currency conversion costs and exchange rate uncertainty, facilitating international trade and investment
2. Superior adjustment mechanisms: Mundell argued that adjustment between regions sharing a common currency occurs "painlessly and effortlessly" as resources flow toward their most productive use
3. Protection against speculation: Fixed rates eliminate destabilizing currency speculation that distorts economic activity
4. Discipline for domestic policy: Fixed exchange rates impose fiscal discipline on governments by eliminating the option to inflate away debts

Mundell viewed the ideal currency area as the entire world, arguing that "a large currency area is a better cushion against shocks than a small currency area, just as a large lake can absorb the impact of a meteor better than a small pond."

3.2 Friedman's Defense of Flexible Exchange Rates

Friedman countered with a robust defense of flexible exchange rates, maintaining that they provided essential adjustment mechanisms for economies facing unique shocks. His key arguments included:

1. The daylight savings time analogy: "It is far simpler to allow one price to change, namely the price of foreign exchange, than to rely upon changes in the multitude of prices that together constitute the internal price structure"
2. Monetary sovereignty: Flexible rates allow nations to pursue monetary policies appropriate to their specific economic conditions
3. Protection against external shocks: Exchange rate adjustments can buffer economies against external disruptions without requiring painful internal adjustments
4. Democratic accountability: National control of monetary policy maintains democratic oversight and accountability

Friedman viewed Mundell's world currency proposal with alarm, considering it "a monstrosity—on a par with my reaction to world government, for that is what a common currency amounts to for one aspect of economic activity."

3.3 The Core Tension: Adjustment Mechanisms and Sovereignty

At its heart, the Mundell-Friedman debate centered on a fundamental tension between international efficiency and national sovereignty. Both economists recognized genuine trade-offs:

• Fixed rates reduce transaction costs but limit policy flexibility
• Flexible rates preserve autonomy but create exchange rate volatility
• Common currencies facilitate integration but require political alignment
• National currencies maintain sovereignty but complicate international transactions

This debate shaped monetary economics for decades, with neither approach fully resolving the tensions identified by the other. The "Impossible Trinity" or "Trilemma" – that nations cannot simultaneously maintain free capital movement, exchange rate stability, and independent monetary policy – seemed to require inevitable sacrifices.

3.4 Global Monetary Systems: Competition vs. Coordination

Friedman and Mundell also differed fundamentally on the ideal structure of the international monetary system. Mundell advocated for coordinated arrangements leading ultimately to a single world currency, while Friedman preferred competing national currencies with market-determined exchange rates.

Friedman wrote: "Competition has a role to play in money as in other areas. Multiple currency areas provide competition and the opportunity for experimentation." This view emphasized the benefits of decentralized monetary arrangements and the risks of concentrated power.

Mundell countered: "I reject as economically wasteful a system of 178 national currencies floating against one another. I would prefer to see fixed exchange rates between the three dominant currency areas and to use fixed dollar-euro-yen unit as a platform from which to launch, under the auspices of the Board of Governors of the International Monetary Fund, a world currency."

This fundamental disagreement about the optimal scale and integration of monetary systems remained unresolved, with the global economy continuing to operate in a hybrid system that fully satisfied neither vision.

4. Upgrading the Friedman Rule: The Zero-Rate Framework

4.1 From Theory to Implementation: Putting "The Fed on a Computer"

One of Friedman's most provocative statements was his 1997 assertion that he "would rather replace the Fed with a computer." This reflected his fundamental distrust of discretionary monetary policy and his belief that systematic rules would outperform human judgment. The Zero-Rate Framework represents the technical realization of this vision through mechanisms that make Friedman's abstract rule directly implementable.

Where Friedman could only conceptualize rule-based policy administered through institutions (his "k-percent rule"), modern technology enables his vision to be fully realized: a monetary system that functions according to transparent, pre-defined parameters without requiring ongoing institutional oversight. The ZRF creates this through a dual mechanism:

1. A modest wealth tax (in the 1-2% range) applied to real assets like property, equities, and passive investments
2. An exemption from this tax for productive financial claims (bonds, loans, active investments)

When combined with a personal consumption tax (VAT), these mechanisms create a dynamic system that can automate fiscal neutrality. The wealth tax targets monetary stability through zero rates on benchmarks, while the VAT adjusts to ensure government expenditures are fully funded. Together, they guarantee price stability while justifying zero rates on benchmark securities through automatic processes rather than discretionary management.

This combination creates natural market pressure driving benchmark yields toward zero through predictable, rule-based processes rather than discretionary intervention. The wealth tax rate functions as the primary policy variable, adjusted according to a transparent formula:

This creates a true rule-based monetary system—one where stability emerges from the interaction of clear parameters rather than the judgment of central bankers. Through distributed ledger technologies, API integration, and smart contracts, this rule can be implemented with minimal administrative overhead, potentially eliminating the need for central bank discretion entirely.

4.2 Solving the Velocity Problem: A Genuine Upgrade to Friedman's Rule

The framework directly addresses the velocity instability that undermined Friedman's k-percent rule. Wealth taxation creates predictable effects on monetary velocity by establishing a clear cost for holding passive assets. This encourages more active circulation of money through the economy, offsetting the velocity declines that often occur during economic downturns.

The relationship can be formalized as:

Where the velocity-enhancing function β[w(t)] can be more precisely defined as:

This creates a system where velocity becomes more predictable and manageable, resolving one of the fundamental challenges that prevented full implementation of Friedman's original approach. By directly incorporating velocity effects into the monetary mechanism, the ZRF represents a genuine upgrade to the Friedman Rule, addressing its key implementation challenge.

4.3 Achieving Zero Nominal Rates Without Deflation

Where Friedman's original rule required deflation equal to the real interest rate to achieve zero nominal rates, the ZRF creates the same outcome through market mechanisms. The exemption of financial claims from wealth taxation generates natural demand pressure that drives benchmark security yields toward zero.

This approach eliminates the need for engineered deflation with its associated economic disruptions. Instead, it creates a system where zero nominal rates emerge from the interactions of market participants responding to clear, stable incentives rather than from central bank manipulation of monetary aggregates.

Most significantly, the ZRF achieves what Friedman couldn't: both zero nominal rates AND near-zero real rates with price stability. Friedman carefully distinguished between general inflation (a monetary phenomenon resulting from excessive money creation) and relative price changes (real economic signals based on supply and demand for specific goods). The ZRF maintains this crucial distinction by creating monetary stability while allowing relative prices to adjust freely to economic conditions.

This preserves the signaling function of the price system that Friedman valued so highly while eliminating the distortions caused by general inflation or deflation. Individual prices remain free to convey information about real economic conditions, while the overall price level remains stable—creating the ideal monetary condition that Friedman sought but couldn't fully operationalize through his deflation-based approach.

The result is a system with no opportunity cost of holding money (zero nominal rates) while maintaining stable purchasing power and efficient price signals—precisely the combination of attributes that defines optimal monetary efficiency in Friedman's framework.

4.4 Automating Monetary Policy Through Built-In Stabilizers

The ZRF transforms monetary policy from a discretionary art to an automated science by embedding stability mechanisms directly into the financial infrastructure. This represents a fundamental evolution beyond Friedman's vision of rules constraining central banks to a system where the rules themselves create stability without requiring institutional enforcement.

The implementation can take two forms:

1. Traditional Financial Infrastructure: The wealth tax and financial claim exemptions can be implemented through existing financial systems, with the formula-based adjustment of the wealth tax rate replacing discretionary interest rate decisions.
2. Distributed Systems: More ambitiously, the entire framework can be implemented through distributed ledger technologies that encode the monetary rules directly into the infrastructure, creating a truly decentralized monetary policy system.

In either implementation, the result is the same: monetary policy becomes a set of transparent, predictable rules that operate without requiring the judgment of central bankers. This fulfills Friedman's vision of removing monetary instability as a source of economic disturbance by eliminating the human element that he believed was the primary source of that instability.

4.5 Resolving Geopolitical Trust and Coordination Problems

The ZRF resolves the geopolitical coordination challenges that have plagued international monetary arrangements. Current systems require either:

1. Trust in a hegemonic power (typically the United States) to manage its monetary policy with global rather than purely domestic considerations
2. Complex international agreements that are difficult to negotiate and enforce
3. Surrender of monetary sovereignty to supranational institutions

The framework eliminates these requirements by creating system-level coordination through aligned incentives rather than trust or formal agreements. When major economies implement wealth taxation targeting zero rates on benchmark securities, their government debt instruments naturally become equivalent stores of value:

• Each economy has benchmark securities yielding r_A, r_B, etc.
• Each implements wealth taxation at rates w^A, w^B, etc.
• The market-driven equilibrium in each economy results in: r_A - w^A + δ^A = r_B - w^B + δ^B = 0

This creates de facto monetary coordination without requiring countries to trust each other's monetary authorities or enter into formal agreements that constrain sovereignty. Nations can independently implement compatible frameworks that naturally align their monetary systems through market mechanisms rather than political arrangements.

This represents a profound evolution beyond both Friedman's national focus and Mundell's coordinated approach. Rather than choosing between monetary sovereignty and international stability, the ZRF demonstrates how properly designed monetary architecture can deliver both simultaneously through automated, rule-based mechanisms that transcend the need for trust between nations.

4.6 Addressing Friedman's Core Tax Principles and Wealth Tax Objections

The Zero-Rate Framework aligns with Friedman's fundamental tax philosophy while addressing his specific objections to wealth taxation. Throughout his career, Friedman consistently advocated for broad tax bases with low rates over narrow bases with high rates. In his 1962 work "Capitalism and Freedom," he argued that an ideal tax system should "distribute the burden broadly, treating people in similar positions similarly" and advocated for removing loopholes and deductions while lowering rates.

The ZRF's combination of wealth taxation and consumption taxation (VAT) embodies this principle perfectly:

1. The wealth tax applies broadly to all real assets, avoiding the narrow targeting and loopholes that characterize many tax systems
2. The low rate (1-2%) minimizes economic distortions while generating substantial revenue due to the broad base
3. The VAT complements this with a broad-based consumption tax that applies uniformly across economic activity

This dual-base approach creates the broad, low-rate system that Friedman favored, generating stable revenue with minimal economic distortion.

Importantly, the framework directly addresses Friedman's specific objections to wealth taxation. Friedman opposed wealth taxes primarily on the grounds that they would reduce investment and capital formation. However, the ZRF transforms this concern through its strategic exemption of financial claims:

1. By exempting bonds, loans, and other productive financial claims from the wealth tax, the framework preserves and enhances incentives for productive capital deployment
2. Rather than reducing overall investment, it redirects capital from passive holding to active productive use, potentially increasing total investment
3. The zero interest rates generated by the system offset any potential dampening effect by reducing the cost of capital throughout the economy
4. The wealth tax's velocity-enhancing effects create more economic activity for a given money supply, further offsetting concerns about reduced capital formation

Evidence from Switzerland, which has maintained wealth taxation (0.3-1.0%) for decades, demonstrates that moderate wealth taxes can coexist with high savings rates and robust investment—even without the financial claim exemption that would further enhance investment incentives under the ZRF.

This alignment with Friedman's tax principles, combined with direct solutions to his wealth tax objections, demonstrates how the ZRF represents an evolution of his thinking rather than a contradiction—adapting his core insights to create a more comprehensive and internally consistent system.

5. Transcending the Exchange Rate Debate

5.1 Addressing Friedman's Sovereignty Concerns

The Zero-Rate Framework preserves the monetary sovereignty that Friedman valued while eliminating the need for the exchange rate volatility he reluctantly accepted. Each nation maintains control over its own monetary system, with wealth tax rates set according to domestic conditions and democratic processes. This addresses Friedman's fundamental concern about concentrating monetary power in unaccountable international bodies.

Unlike fixed exchange rate regimes or currency unions that require surrendering monetary autonomy, the ZRF allows nations to maintain independent monetary systems while creating natural alignment through market mechanisms rather than through political arrangements or central authority.

This represents a significant evolution beyond Friedman's approach, which accepted exchange rate volatility as the necessary cost of preserving monetary sovereignty. The ZRF demonstrates that this trade-off is not inevitable but stems from limitations in conventional monetary architecture.

5.2 Delivering Mundell's Stability Benefits

Simultaneously, the framework delivers the reduced transaction costs and stability that Mundell sought. When major economies implement wealth taxation targeting zero rates on benchmark securities, their government debt instruments become equivalent stores of value through a specific mechanism:

• Each economy has benchmark securities yielding r_A, r_B, etc.
• Each implements wealth taxation at rates w^A, w^B, etc.
• The market-driven equilibrium in each economy results in: r_A - w^A + δ^A = r_B - w^B + δ^B = 0

Under these conditions, the after-tax yield on benchmark securities across participating economies converges to zero, with risk differentials becoming minimal due to the fiscal sustainability inherent in the system. This creates stability in international transactions and reduces currency speculation without requiring formal pegs or centralized management.

5.3 Resolving the "Impossible Trinity"

The framework effectively resolves the "Impossible Trinity" or "Trilemma" that has constrained international monetary arrangements. Nations have traditionally been unable to simultaneously maintain free capital movement, exchange rate stability, and independent monetary policy, being forced to sacrifice one objective.

The ZRF sidesteps this trilemma by changing how monetary stability is achieved:

• Free capital movement is maintained because the wealth tax applies domestically regardless of international flows
• Monetary autonomy operates through the wealth tax rate rather than interest rates
• Exchange rate stability emerges naturally as benchmark securities across participating countries converge to similar after-tax returns

This fundamentally transforms what appeared to be an inevitable trade-off into a false dichotomy stemming from limitations in conventional monetary approaches.

5.4 Market-Based Coordination Without Centralization

The framework creates international monetary coordination through aligned incentives rather than formal arrangements or central authority. This addresses both Friedman's concerns about concentrated power and Mundell's desire for international stability.

As Friedman noted, "Competition has a role to play in money as in other areas. Multiple currency areas provide competition and the opportunity for experimentation." The ZRF preserves this competition while creating natural alignment through parallel incentive structures rather than through formal pegs or a single currency.

This represents a more sophisticated form of coordination than either economist envisioned – one that emerges from compatible national systems rather than being imposed through international agreements or central authorities.

6. Addressing Contemporary Challenges Through Automated Monetary Coordination

6.1 The Reserve Currency Dilemma and Automated Solutions

The current international monetary system forces reserve currency issuers (primarily the United States) into a painful dilemma: maintaining currency primacy requires capital inflows that generate persistent trade deficits, eroding the domestic manufacturing base and creating strategic vulnerabilities.

This dilemma exists precisely because it relies on discretionary management rather than rule-based automation. The ZRF resolves this through automated mechanisms that transform a zero-sum game into a positive-sum arrangement:

• Funding security directly through wealth taxation rather than requiring trade deficits
• Creating equivalent benchmark securities across participating economies through algorithmic processes
• Eliminating the need for a single dominant reserve currency through automated equivalence mechanisms
• Addressing the approximately $32 trillion in offshore wealth through systematic rather than discretionary approaches

The true innovation here is not just the policy but its implementation through rule-based processes that don't require trust between nations. The wealth tax mechanism operates as a distributed protocol rather than a centrally managed policy, creating monetary stability through automated rather than discretionary means.

Under this framework, capital would flow in response to genuine productive opportunities rather than monetary hierarchy, allowing more balanced trade relationships and preventing the manufacturing erosion that has plagued reserve currency issuers—all without requiring international coordination agreements that have proven impossible to maintain.

6.2 Manufacturing Concentration and Automated Redistribution

Current monetary arrangements have contributed to dangerous concentrations of manufacturing capacity, creating strategic vulnerabilities. Over 90% of advanced semiconductors are manufactured in Taiwan, while critical pharmaceutical ingredients and rare earth minerals are concentrated in potential adversary nations.

The ZRF addresses these vulnerabilities through automated redistribution mechanisms rather than managed trade policies:

• Algorithmic adjustment of the wealth tax rate creates natural pressure against currency manipulation
• Rule-based financial claim exemptions automatically incentivize productive investment across regions
• Systematic equivalence of benchmark securities creates conditions where manufacturing distributes according to genuine comparative advantage

This approach "puts the Fed on a computer" not just domestically but internationally, creating automatic stabilizers that distribute manufacturing capacity according to genuine productive advantages rather than monetary distortions.

Consider semiconductors: under current conditions, manufacturing concentrated in Taiwan and South Korea due to currency management and export-oriented growth models. Under the ZRF, these nations would no longer need to suppress domestic consumption to maintain export competitiveness, while the US would be freed from reserve currency obligations that hollow out its manufacturing base—all through automated processes rather than negotiated agreements.

6.3 Automating Currency Stability and Trade Balance

The current system creates incentives for currency manipulation to maintain export competitiveness, leading to persistent trade imbalances and international tensions. Nations like China have systematically suppressed domestic consumption to maintain export advantages, creating unsustainable global imbalances.

The ZRF replaces discretionary currency management with automated stability mechanisms:

• Formula-driven wealth tax rates create algorithmic pressure toward stable benchmark security yields
• Automated equilibrium processes ensure equivalent after-tax returns across economies
• Rule-based velocity management maintains price stability without requiring central bank intervention

This approach eliminates the need for trust between nations by embedding coordination directly into the monetary infrastructure. Rather than requiring countries to believe that others won't manipulate their currencies, it creates conditions where such manipulation becomes ineffective through the automatic operation of the wealth tax mechanism.

6.4 Fiscal Neutrality Through Automated Stabilizers

The current debt-based monetary system creates a growth imperative – economies must continuously expand to service accumulating debt, creating tensions between economic and ecological sustainability. The ZRF addresses this through automated fiscal stabilizers:

• The wealth tax automatically adjusts to target zero benchmark rates according to a transparent formula
• A complementary VAT adjusts to maintain fiscal neutrality across the system
• Together, they create automatic alignment between government funding and expenditures without requiring discretionary intervention

This represents a fundamental upgrade to Friedman's vision of rules-based policy. Rather than requiring institutions to follow rules (which they inevitably violate under pressure), the ZRF embeds those rules directly into the monetary and fiscal architecture through automated mechanisms that function without requiring trust or discretion.

By addressing these contemporary challenges through automated rather than discretionary means, the ZRF fulfills Friedman's vision of replacing human judgment with systematic rules—not just domestically but in the international sphere as well.

7. Conclusion: The Automated, Practical Realization of Friedman's Vision

The Zero-Rate Framework represents the technological fulfillment of Friedman's monetary vision. By upgrading the Friedman Rule through wealth taxation with financial claim exemptions, it achieves what he sought but couldn't fully operationalize: a truly automated monetary system that eliminates discretionary intervention while maintaining stability.

Friedman's statement that he would "rather replace the Fed with a computer" reflected his deep skepticism of human judgment in monetary policy. The ZRF realizes this vision by embedding monetary rules directly into the financial infrastructure through automated mechanisms:

1. Formula-based adjustment of the wealth tax rate replaces discretionary interest rate decisions
2. Algorithmic equilibrium processes maintain zero benchmark rates without central bank intervention
3. Automated velocity management stabilizes monetary conditions without requiring human judgment
4. Rule-based mechanisms coordinate international monetary relations without requiring trust or agreements

This automated approach fulfills Friedman's vision of "a monetary system at the global level that eliminates the need for government intervention and provides stability." Where he could only envision constraining monetary authorities through rules, the ZRF creates conditions where stability emerges naturally from the monetary architecture itself.

By transcending the Mundell-Friedman debate on exchange rate regimes, the framework demonstrates that the apparent trade-offs between national sovereignty and international coordination stem from limitations in conventional monetary approaches rather than representing inevitable choices. The ZRF creates system-level coordination through aligned incentives and automated processes rather than through trust or formal agreements.

Most importantly, the framework shows how technology enables the practical implementation of theoretical insights that were ahead of their time. Friedman's optimal monetary policy (zero nominal interest rates) becomes achievable without deflation through automated mechanisms that would have been impractical in his era. His preference for rules over discretion evolves from institutional constraints to infrastructural design.

In addressing contemporary challenges of reserve currency dynamics, manufacturing concentration, and trade imbalances through automated rather than discretionary means, the ZRF shows how evolved monetary architecture can resolve problems that seemed intractable within traditional frameworks.

Friedman himself was always willing to adapt his practical recommendations to changing conditions while maintaining his core principles. The Zero-Rate Framework offers a way to fulfill his vision of monetary stability in an era he did not live to see, but whose technological possibilities he would likely have embraced in service of his enduring goal: an automated monetary environment where economic actors can make decisions without needing to anticipate capricious policy shifts.