Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Saturday, November 18, 2006

Milton Friedman, R.I.P.

Bad but not entirely unexpected news this morning:

Influential Economist Friedman Dies at 94 - WSJ.com: By GREG IP: Nobel prize winner Milton Friedman, one of the most influential economists of the last century, died today. He was 94.

Mr. Friedman's Chicago School of thought stressed the virtues of unfettered markets. Mr. Friedman, a leading advocate of free markets, championed monetarism, the notion that the inflation can be regulated by the Federal Reserve's control of the money supply. He wrote extensively on the Great Depression and was an advocate of libertarian ideas such as the decriminalization of drugs.

Mr. Friedman died of heart failure after being taken to hospital near his home in San Francisco, his daughter, Janet Martell, said today. His wife Rose Friedman, who co-authored many of his books, survives him.

1912 — Born in New York.

1932-1933 — Receives bachelors degree from Rutgers University, masters degree from the University of Chicago.

1937 — Becomes a member of the research staff of the National Bureau of Economic Research, a post he would maintain until 1981.

1945 — With coauthor Simon Kuznets, publishes "Income From Independent Professional Practice," his doctoral thesis.

1946 — Receives doctorate from Columbia University and is hired to teach at the University of Chicago, where he serves as a professor of economics until 1976. Friedman would come to be seen as the leader of the Chicago School of monetary economics, which stresses the importance of the money supply as an instrument of policy and a determinant of the business cycle.

1951 — Wins the John Bates Clark Medal, which honors top economists under the age of 40.

1956 — "Studies in the Quantity Theory of Money" is published. In it, Friedman argues that increased monetary growth over the long run raises prices but has no effect on output. In the short term, increased money supply boost hiring and output.

1957 — "A Theory of Consumption Function" is published. Considered a landmark study, it tackles the notion, associated with John Maynard Keynes, that consumers adjust their spending to reflect current income, arguing instead that people's annual consumption is a function of what they expect to earn over the course of their lifetime.

1962 — "Capitalism and Freedom" is published. Friedman's key text on free markets, it argues in favor of floating currency exchange rates, an all-volunteer military, a negative income tax and education vouchers.

1963 — "A Monetary History of the United States, 1867-1960", co-authored with Anna J. Schwartz, is published. In a work that would become hugely influential in the field of monetary economics, Friedman and Schwartz used historical narrative and reams of supporting data to argue that steady control of the money supply is crucial in steering the economy. The book famously critiqued the Federal Reserve's performance during the Great Depression and the central bank launched a lengthy internal review of its policy-making after receiving a prepublication draft of the book. The Fed commissioned Elmus R. Wicker to write a rejoinder in hopes of deflecting some of Friedman's arguments.

1964 — Serves informally as an economic adviser to Republican presidential candidate Barry Goldwater. Later, Friedman served as an economic adviser to Richard Nixon's 1968 presidential campaign, and to Ronald Reagan's 1980 campaign.

1967 — Serves as president of the American Economic Association.

1975 — Friedman makes a controversial trip to Chile, along with several other University of Chicago professors, where he meets with dictator Gen. Augusto Pinochet.

1976 —Is awarded the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in economics for his work in the fields of "consumption analysis, monetary theory and history and for his demonstration of the complexitity of stabilization policy."

1977 — Becomes a senior research fellow at the libertarian Hoover Institution at Stanford University.

1980 — PBS airs the 10-part "Free to Choose," which is made into a bestselling book co-authored with his wife, Rose Friedman. The series and book were a robust defense of the couple's free-market economic beliefs.

1981 — Serves as a member of Reagan's Economic Policy Advisory Board.

1988 — Receives Presidential Medal of Freedom and National Medal of Science.

2002 — President Bush speaks at a ceremony honoring Friedman, celebrating his 90th birthday and recognizing his contributions to the study of economics.

Nov. 16, 2006 — Friedman dies of heart failure at a hospital near his home in San Francisco. He was 94.

There's a story that at lunch at the White House in 2002 he told George W. Bush exactly what he thought about Bush's unpaid-for tax cuts. We will miss him.

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