Milton Friedman, 1912-2006

Photo of M. Friedman

One of the most highly influential economists, political commentators and essayists of the century, Milton Friedman is perhaps the best known living economist. An ardent opponent of the Keynesian economics, Friedman led the "Monetarist" incarnation of the Chicago School against the Keynesian orthodoxy in the 1960s and early 1970s. (click here for our Survey of Monetarism)

Friedman's early contributions include the "Permanent Income Hypothesis" in consumption (1957), his formulation of  risk-aversion and risk-proclivity (1948, with L.J. Savage), his use of evolutionary theory in the theory of the firm,   and his propositions for a "positivist" methodology in economics (1953).  

Friedman's important criticisms of Keynesian theory began with his attack on the IS-LM dichotomy in his "restatement" of the Quantity Theory in 1956 -- effectively, reminding Keynesians that "money matters". This was followed up by a massive historical study with Anna J. Schwartz on the Monetary History of the United States (1963) - leading to a famous debate on money-income causality.  In his famous presidential address to the American Economic Association, Friedman (1968) then focused his attention upon the apparent breakdown of the Phillips Curve relationship in the 1970s, proposing to replace it with a "Natural Rate of Unemployment" (NRU) - a concept later formalized in more detail by the New Classicals.

Friedman wrote much on various aspects of  economic policy.  In general, he argued that government discretionary "fine-tuning" of the economy, as had been proposed by Keynesians, ought to be replaced with iron "rules" of policy - notably his famous "money supply growth" rule.   He also wrote several popular volumes advocating laissez-faire policies more generally. Friedman won the Nobel Memorial prize in 1976.  

Major Works of Milton Friedman

Resources on Milton Friedman