Milton Friedman

(1912—2006) American economist

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US economist and leading proponent of monetarism in the Chicago School. He won the Nobel Prize for Economics in 1976.

Born in New York and educated at Chicago and Columbia universities, Friedman worked for the Natural Resources Commission in Washington, followed by research at the National Bureau of Economic Research. During World War II he served in the Tax Research Division of the US Treasury and then in the Statistical Research Group of the Division of War Research, Columbia University. He became professor of economics at Chicago in 1945 and remained there until 1983, serving also as senior research fellow at the Hoover Institution, Stanford University, from 1976. From 1981 until 1988 he was a member of President Reagan's Economic Policy Advisory Board.

Friedman is known worldwide for his studies of the influence of the quantity of money (bank deposits and currency) in an economy on the level of production. He was a strong believer in the efficiency of the market and minimal government interference. In Friedman's view, changes in the money supply cause changes in the level of production, not the other way round, and controlling the money supply is the most effective way to tackle inflation. These ideas were a major influence on government economic policy in Britain and the USA during the 1980s. He also proposed a theory of permanent income, in which an individual's spending decisions depend not on his or her wealth at the time but on expected lifetime wealth.

Friedman's publications include Taxing to Prevent Inflation (1943), A Theory of the Consumption Function (1957), Price Theory (1962), A Monetary History of the United States 1867–1960 (1963), The Optimum Quantity of Money (1969), A Theoretical Framework for Monetary Analysis (1971), and Money Mischief (1992). With Anna J. Schwartz he wrote Monetary Trends in the United States and the United Kingdom (1982) and with his wife Rose (whom he married in 1938) he wrote Free to Choose (1980) and Tyranny of the Status Quo (1984).

Subjects: Social Sciences.

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