Abstract
Milton Friedman is widely regarded as one of the most important economists of the 20th century. He is famous for his rehabilitation of money as a major determinant of macroeconomic outcomes. For many academic economists, A Theory of the Consumption Function (1957) is his greatest work. Friedman showed that the Keynesian concept of household behaviour was fundamentally flawed, arguing that people adjusted their consumption to variations in their long-term expected (‘permanent’) income. As such, his theory foreshadows the approach to microfoundations that is the cornerstone of modern macroeconomics. His advocacy of economic freedom and market solutions to various socio-economic problems made him a leading policy thinker.
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Bibliography
Hammond, J.D. 1999. The legacy of Milton Friedman as teacher. Cheltenham: Edward Elgar.
Hammond, J.D. 2005. Theory and measurement: Causality issues in Milton Friedman’s monetary economics. Cambridge: Cambridge University Press.
Keynes, J.M. 1936. The general theory of employment, interest, and money. New York: Macmillan.
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Walters, A. (2018). Friedman, Milton (1912–2006). In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1132
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DOI: https://doi.org/10.1057/978-1-349-95189-5_1132
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