In 1948 Milton Friedman and Anna J. Schwartz embarked on a National Bureau of Economic Research study of monetary factors in business cycles. According to a brief prospectus written by Friedman at the start of the project, their objectives included investigation of “the causal role of monetary and banking phenomena in producing cyclical fluctuations, intensifying or mitigating their severity, or determining their character (“Brief Statement,” undated, p. 1, emphasis added). Their plan was to complete the project in three years, however, it continued for over three decades. It produced, among other publications, “Money and Business Cycles” (1963a), A Monetary History of the United States, 1867–1960 (1963b), Monetary Statistics of the United States: Estimates, Sources, and Methods (1970), and Monetary Trends in the United States and the United Kingdom: Their Relation to Income, Prices, and Interest Rates, 1867–1975 (1982).

The concept of causality carried no particular significance for Friedman and Schwartz in 1948. The pursuit of understanding money's role in business cycles, though a formidable challenge, seemed naturally and unobjectionably to call for analysis of causes and effects. As David Hume, himself a prominent eighteenth-century monetary economist as well as philosopher, noted, causality is the “cement of the universe.” Our attempts to understand the material and social world around us through science are almost always attempts to sort out causes and effects and often then to gauge their magnitudes. Furthermore, the record of science reveals substantial success in attempts to do this sorting and measuring.