MILTON FRIEDMAN

Milton Friedman born : -(1912-07-31)July 31, 1912

Brooklyn, New YorkDied : -November 16, 2006(2006-11-16)

(aged 94)San Francisco, California

Nationality: -United StatesInstitution: - Hoover Institution (1977–2006)University of Chicago (1946–77)Columbia University (1937–41, 1943–45, 1964–65)NBER (1937–40)

Contributions: -Price theory, Monetarism, applied macroeconomics, floating exchange rates, volunteer military, Permanent income hypothesis, Friedman testAwards National Medal of Science (1988)

John Bates Clark Medal (1951) Nobel Memorial Prize in Economics (1976)

Presidential Medal of Freedom (1988)

The Economist have described him as “the most influential economist of the 20th century…..possibly

of all of it”.

He is also ranked as the Second Most Popular Economist in the World Behind J.M Keynes.

Milton Friedman’s monumental Monetary History of the United States empirically crushed the Keynesian model with page after page of data. Friedman concluded that “inflation is always and everywhere a monetary phenomenon.” And that has been that ever since.(Supply of Money)

The easy-money advocates had a tough summer. In August alone, the price level increased almost half a percent, raising the average annual rate of inflation for the past three months to almost 5 percent. Wholesale prices, especially of raw materials, have also been moving upwards, as has the “prices paid” index of the Institute for Supply Management's survey of the manufacturing sector (the service sector has had more mixed recent results). Across the board, the stats show a broad consensus that we have switched from a deflationary trend to an inflationary one.

His Theory Of MonetarismMilton Friedman was the one who laid great stress on general price level but more importantly in influencing the level of economic activity. Keynes and his early followers (EARLY KRYNESIANS) thought that Money was Unimportant or “MONEY DOES NOT MATTER”.

FRIEDMAN RESTATED THE QUANTITY THEORY OF MONEY:-

d

M = k( rB, rE, rD)PY d

This is FRIEDMAN MONEY DEMAND FUNCTION . Where M = Demand for money. P is the Price level, Y is the level of Real Income. rB is the Rate of interest of Bond, rE is the rate of return on the EQUITY BONDS, rD is the rate of return on Durable Goods.

He Opposed some of the Ideas of Other Economists like: -

J.M Keynes

Murray Rothbard

Some Economists who have Influenced him are:

George Stigler

Irving Fisher

Adam Smith

Jacob Viner

Some Books of Milton Friedman