Michael T. Belongia explains the sequence of events through which short-run fluctuations in M1 growth make future economic conditions more uncertain and, thus, cause reductions in the growth of GNP. Belongia investigates the impact of variable money growth on GNP by estimating a variant of the St. Louis equation that incorporates directly a measure of the variability of money growth. He finds that the effects of variable M1 growth were negative, but transitory in nature, prior to 1980. Since 1980, however, the variability of M1 growth has tripled, and its negative effects on the path of GNP have become permanent. In a simulation experiment, the author shows that the growth of nominal GNP would have been higher and more stable between 1979 and 1982 if M1 growth had been less variable over that period.