Economic Philosophis Of Milton Friedman

Milton Friedman

Throughout the 20th Century new economic and social philosophies developed to support government policy. One of the major economic philosophers is Milton Friedman born on July 31 in 1912. He graduated from Rahway High in 1928 and Rutgers University in 1932. His main area of study was economics and mathematics and pursued statistics during his fellowship at Columbia University in 1934 (Ferrero, Hoffman, & McNulty, 2014). He belonged to the neoclassical school of thought mainly linked to research and studies from the University of Chicago. His major contributions to economics include his support for free markets and deregulation to promote economic growth and solve economic issues such as unemployment and inflation.

His earlier

According to Cole (2008) Milton Friedman wrote books such as Capitalism and Freedom (1962) where he addressed issues such as employment and income inequality. He initiated the permanent income hypothesis model based on long term income expectations that control nationwide consumption trends rather than current income. Individuals with higher incomes have a reduced tendency to consume leading to the theory of consumption function. He analyzed the limitations of fiscal policy since the government efforts that focused on spending to boost the economy were ineffective. In his arguments, Friedman claimed that raising spending rates failed to create new national wealth (Hammond & Cord, 2016). He argued that higher spending tends to relocate existing wealth supported his claims using empirical evidence from the Civil War and World Wars. He therefore concluded that monetary policy has a positive impact on the

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Lothian, J. (2009). Milton Friedman's Monetary Economics and the Quantity Theory Tradition. Journal of International Money and Finance, 28(7), 1086-1096. doi: 10.1016/j.jimonfin.2009.06.002.

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