The Impact of Milton Friedman on Modern Monetary Economics: Setting the Record Straight on Paul Krugman's 'Who Was Milton Friedman?'
FRB of St. Louis Working Paper No. 2007-048D
45 Pages Posted: 31 Oct 2007
Date Written: January 9, 2008
Paul Krugman's essay "Who Was Milton Friedman?" seriously mischaracterizes Friedman's economics and his legacy. In this paper we provide a rejoinder to Krugman on these issues. In the course of setting the record straight, we provide a self-contained guide to Milton Friedman's impact on modern monetary economics and on today's central banks. We also refute the conclusions that Krugman draws about monetary policy from the experiences of the United States in the 1930s and of Japan in the 1990s.
Keywords: monetarism, New Keynesian economics, inflation, price controls, Great Depression
JEL Classification: E31, E51, E58
Suggested Citation: Suggested Citation