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Let's get the obvious out of the way: The thermostat concept is an analogy. In Friedman's original article, it's being used to describe money supply targeting [not real thermostats].

Nick Rowe is abstracting away some of the specifics of Friedman's article, but he's talking about the same concept : how active targeting of one measure can achieve desirable changes in another one while still showing no/little correlation between the two.

Rowe is also applying that abstraction to another concrete example: the pedals in a car driving in a hilly area.



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