Money and the Transmission Mechanism in the Optimizing IS
... It is true that Hicks’ (1937) original derivation of his “IS-LL” curves was under the assumption of fully rigid nominal wages, while even some modern textbook treatments (e.g. Auerbach and Kotlikoff, 1995, p. 314) give the impression that the derivation of IS and LM relations requires the assumptio ...
... It is true that Hicks’ (1937) original derivation of his “IS-LL” curves was under the assumption of fully rigid nominal wages, while even some modern textbook treatments (e.g. Auerbach and Kotlikoff, 1995, p. 314) give the impression that the derivation of IS and LM relations requires the assumptio ...
NBER WORKING PAPER SERIES MONETARY POLICY MATTER? A NEW TEST IN
... these monetary disturbances are highly persistent. Second, the six shocks that we identify account for a considerable fraction of postwar economic fluctuations. And third, evidence from the interwar era also suggests that monetary disturbances have large real effects. ...
... these monetary disturbances are highly persistent. Second, the six shocks that we identify account for a considerable fraction of postwar economic fluctuations. And third, evidence from the interwar era also suggests that monetary disturbances have large real effects. ...
Murray Rothbard`s America`s Great Depression
... lifetime. From a reading of his many books and articles, one gets the sense that Murray was one of the most well-read and well-studied men of his time. His knowledge of obscure historical figures and his ability to connect ancient, classical and modern philosophical arguments and theories demonstrat ...
... lifetime. From a reading of his many books and articles, one gets the sense that Murray was one of the most well-read and well-studied men of his time. His knowledge of obscure historical figures and his ability to connect ancient, classical and modern philosophical arguments and theories demonstrat ...
Economics, Economists, and Expectations: Microfoundations to
... Friedman predicted that the Phillips curve trade-off between inflation and unemployment existed temporarily, but not permanently. Friedman asserted that “Phillips’ analysis . . . contains a basic defect – the failure to distinguish between nominal wages and real wages”. In his Nobel Lecture, Friedman ...
... Friedman predicted that the Phillips curve trade-off between inflation and unemployment existed temporarily, but not permanently. Friedman asserted that “Phillips’ analysis . . . contains a basic defect – the failure to distinguish between nominal wages and real wages”. In his Nobel Lecture, Friedman ...
Textbooks and Pure Fiscal Policy: The Neglect of Monetary Basics
... A typical policy scenario in these textbooks has the government debtfinancing an increase in its government spending, leaving the money supply unchanged. An unchanged money supply classifies the fiscal action as “pure.” Given that the IS-LM diagrammatics have no shift in the LM schedule occurring, e ...
... A typical policy scenario in these textbooks has the government debtfinancing an increase in its government spending, leaving the money supply unchanged. An unchanged money supply classifies the fiscal action as “pure.” Given that the IS-LM diagrammatics have no shift in the LM schedule occurring, e ...
pdf copy of this Policy Study
... on his theories about the marginal propensity to consume and the multiplier effect. His writings had broad policy implications, such as President Franklin D. Roosevelt’s New Deal, which shaped much of the 20th century’s understanding of the relationship between government and the economy. At best, K ...
... on his theories about the marginal propensity to consume and the multiplier effect. His writings had broad policy implications, such as President Franklin D. Roosevelt’s New Deal, which shaped much of the 20th century’s understanding of the relationship between government and the economy. At best, K ...
NBER WORKING PAPER SERIES ON THE ORIGINS OF "A MONETARY HISTORY"
... of money, and none produced an interpretation that integrated supply and demand. Historians of economic thought interested in Mitchell, for example Howard Sherman (2001), have downplayed Mitchell's views about the role of money in the business cycle, or emphasized the differences between Mitchell an ...
... of money, and none produced an interpretation that integrated supply and demand. Historians of economic thought interested in Mitchell, for example Howard Sherman (2001), have downplayed Mitchell's views about the role of money in the business cycle, or emphasized the differences between Mitchell an ...
What has Happened to Monetarism? An Investigation into the
... To an important extent, the formation of Friedman's own "money matters" view of the world was inspired by the empirical studies undertaken since 1948 for the National Bureau for Economic Research on monetary factors in business cycles in collaboration with Anna J. Schwartz, particularly their re-exa ...
... To an important extent, the formation of Friedman's own "money matters" view of the world was inspired by the empirical studies undertaken since 1948 for the National Bureau for Economic Research on monetary factors in business cycles in collaboration with Anna J. Schwartz, particularly their re-exa ...
The Demand for Money - Spears School of Business
... Because Yp does not fluctuate a great deal in the short-run, Md should be quite stable [Note: Keynian Md not very stable] ...
... Because Yp does not fluctuate a great deal in the short-run, Md should be quite stable [Note: Keynian Md not very stable] ...
An optimum-currency
... discussion of optimum-currency-areas. First, although Mundell is frequently cited as the originator of the concept of an optimum-currency-area, the basic tenets of optimumcurrency-area theory had already been worked-out by Friedman by the early 1950s (Cesarano, 2006). In formulating the notion of an ...
... discussion of optimum-currency-areas. First, although Mundell is frequently cited as the originator of the concept of an optimum-currency-area, the basic tenets of optimumcurrency-area theory had already been worked-out by Friedman by the early 1950s (Cesarano, 2006). In formulating the notion of an ...
How Friedman and Schwartz became monetarists
... Hammond (1996) and Rockoff (2006). Much of the work on the book took place in correspondence between Friedman in Chicago, and Schwartz, who was a researcher of the National Bureau of Economic Research, in New York. Here, we want to highlight two points. The first has to do with Friedman’s role. From ...
... Hammond (1996) and Rockoff (2006). Much of the work on the book took place in correspondence between Friedman in Chicago, and Schwartz, who was a researcher of the National Bureau of Economic Research, in New York. Here, we want to highlight two points. The first has to do with Friedman’s role. From ...
Articles The Triumph of Monetarism?
... connected with their underlying monetary theory. In Patinkin and Johnson's view, Old Chicago Monetarism was a retrospective construction by Milton Friedman (1956). In their view, Friedman used "Keynesian" tools and insights to provide a retrospective posthoc theoretical justification for policy reco ...
... connected with their underlying monetary theory. In Patinkin and Johnson's view, Old Chicago Monetarism was a retrospective construction by Milton Friedman (1956). In their view, Friedman used "Keynesian" tools and insights to provide a retrospective posthoc theoretical justification for policy reco ...
Simons, Friedman and the development of monetary
... federal government’s fiscal stance; fiscal deficits would be used to increase the quantity of money and fiscal surpluses would be used to decrease the quantity of money. Beginning in the late-1950s, Friedman (1958, 1960) advocated a rule that targeted a constant rate of growth of the money supply. U ...
... federal government’s fiscal stance; fiscal deficits would be used to increase the quantity of money and fiscal surpluses would be used to decrease the quantity of money. Beginning in the late-1950s, Friedman (1958, 1960) advocated a rule that targeted a constant rate of growth of the money supply. U ...
ECON 3080-002 Intermediate Macroeconomic Theory
... V. Keynes in his 1936 book, the General Theory of Employment, Interest and Money, argued that the market economy might not be essentially stable. VI. Acceptance of Keynesianism 1. By 1964 most economists were Keynesians 2. The first Keynesian guided U.S. president was J.P. Kennedy. 3. Richard Nixon ...
... V. Keynes in his 1936 book, the General Theory of Employment, Interest and Money, argued that the market economy might not be essentially stable. VI. Acceptance of Keynesianism 1. By 1964 most economists were Keynesians 2. The first Keynesian guided U.S. president was J.P. Kennedy. 3. Richard Nixon ...
IS-LM and Monetarism
... In the money market, Hicks distinguishes the Keynesian demand for money or liquidity preference function—a negative function of the interest rate—from the classical Cambridge cash balance equation where money is solely a positive function of income. In a more general Keynesian model, money demand de ...
... In the money market, Hicks distinguishes the Keynesian demand for money or liquidity preference function—a negative function of the interest rate—from the classical Cambridge cash balance equation where money is solely a positive function of income. In a more general Keynesian model, money demand de ...
ECON 3080-003 Intermediate Macroeconomic Theory
... VI. Acceptance of Keynesianism 1. By 1964 most economists were Keynesians 2. The first Keynesian guided U.S. president was J.F. Kennedy. 3. Richard Nixon said, ''we're all Keynesians now." VII. Break down of Keynesian Monopoly on Economic Ideas 1. Starting in the 1950's Milton Friedman challenges th ...
... VI. Acceptance of Keynesianism 1. By 1964 most economists were Keynesians 2. The first Keynesian guided U.S. president was J.F. Kennedy. 3. Richard Nixon said, ''we're all Keynesians now." VII. Break down of Keynesian Monopoly on Economic Ideas 1. Starting in the 1950's Milton Friedman challenges th ...
NBER WORKING PAPER SERIES IS-LM AND MONETARISM Michael D. Bordo Anna J. Schwartz
... (1969, 1970) offered the most critical appraisal. He did so not on grounds that its substance was flawed, but for three incidental shortcomings. One, it was an improper representation of the traditional quantity theory. Two, it was a misinterpretation of doctrinal history, of the shift from the tran ...
... (1969, 1970) offered the most critical appraisal. He did so not on grounds that its substance was flawed, but for three incidental shortcomings. One, it was an improper representation of the traditional quantity theory. Two, it was a misinterpretation of doctrinal history, of the shift from the tran ...
ECON 3080-001 Intermediate Macroeconomic Theory
... fiscal policy can only affect the "real" portion of the economy when their use is unexpected. Since it is thought that policy changes cannot be kept secret in the modern economy, New Classical economists concluded that anticipated government action can have no impact on the economy. Hence, the econo ...
... fiscal policy can only affect the "real" portion of the economy when their use is unexpected. Since it is thought that policy changes cannot be kept secret in the modern economy, New Classical economists concluded that anticipated government action can have no impact on the economy. Hence, the econo ...
The Contributions of Milton Friedman to Economics
... Friedman (Friedman and Kuznets 1945) established the pattern for his contributions to public policy in his book, Income from Independent Professional Practice, coauthored with Simon Kuznets. In it, he calculated the rate of return to education by dentists and doctors. The book was one of the earlies ...
... Friedman (Friedman and Kuznets 1945) established the pattern for his contributions to public policy in his book, Income from Independent Professional Practice, coauthored with Simon Kuznets. In it, he calculated the rate of return to education by dentists and doctors. The book was one of the earlies ...
The change of paradigm of Milton Friedman
... Milton Friedman succeeded because Keynes had to be buried. It came out that the paradigm of the curve of Philips blew up, and the world was facing stagnation along with inflation. As Keynesianism couldn’t come up with an answer to unemployment and inflation at the same time, monetarism was imposed a ...
... Milton Friedman succeeded because Keynes had to be buried. It came out that the paradigm of the curve of Philips blew up, and the world was facing stagnation along with inflation. As Keynesianism couldn’t come up with an answer to unemployment and inflation at the same time, monetarism was imposed a ...
Milton Friedman`s economics and political - Hans-Böckler
... labeled “new Pigovian” economics (Palley, 2009) as its emphasis on market imperfections represents the approach of Arthur Pigou, who was Keynes’ great intellectual rival at Cambridge in the 1930s. This means new Keynesianism has little to do with Keynes and much to do with Friedman who is the intell ...
... labeled “new Pigovian” economics (Palley, 2009) as its emphasis on market imperfections represents the approach of Arthur Pigou, who was Keynes’ great intellectual rival at Cambridge in the 1930s. This means new Keynesianism has little to do with Keynes and much to do with Friedman who is the intell ...
Crop-Destruction Program (Roosevelt)
... argued about long before the Great Depression and long before Keynes wrote his General Theory. A fully satisfying explanation requires that we consider the phenomenon of boom, bust, depression, and recovery. But sorting out the differences between Milton Friedman and Maynard Keynes can be achieved w ...
... argued about long before the Great Depression and long before Keynes wrote his General Theory. A fully satisfying explanation requires that we consider the phenomenon of boom, bust, depression, and recovery. But sorting out the differences between Milton Friedman and Maynard Keynes can be achieved w ...
Milton Friedman`s economics and political economy
... labeled “new Pigovian” economics (Palley, 2009) as its emphasis on market imperfections represents the approach of Arthur Pigou, who was Keynes’ great intellectual rival at Cambridge in the 1930s. This means new Keynesianism has little to do with Keynes and much to do with Friedman who is the intell ...
... labeled “new Pigovian” economics (Palley, 2009) as its emphasis on market imperfections represents the approach of Arthur Pigou, who was Keynes’ great intellectual rival at Cambridge in the 1930s. This means new Keynesianism has little to do with Keynes and much to do with Friedman who is the intell ...
Anna Jacobson Schwartz: In Memoriam George S. Tavlas
... permitted the Depression to deepen when a series of bank failures led to a liquidity crisis and the Fed failed to provide sufficient liquidity to enable the banks to meet the demands of their customers. By allowing the money supply to fall by over a third between 1929 and 1933, the Fed bore the majo ...
... permitted the Depression to deepen when a series of bank failures led to a liquidity crisis and the Fed failed to provide sufficient liquidity to enable the banks to meet the demands of their customers. By allowing the money supply to fall by over a third between 1929 and 1933, the Fed bore the majo ...
ECON 3080-002 Intermediate Macroeconomic Theory
... VI. Acceptance of Keynesianism 1. By 1964 most economists were Keynesians 2. The first Keynesian guided U.S. president was J.F. Kennedy. 3. Richard Nixon said, "we're all Keynesians now." Vil. Break down of Keynesian Monopoly on Economic Ideas 1. Starting in the 1950's Milton Friedman challenges th ...
... VI. Acceptance of Keynesianism 1. By 1964 most economists were Keynesians 2. The first Keynesian guided U.S. president was J.F. Kennedy. 3. Richard Nixon said, "we're all Keynesians now." Vil. Break down of Keynesian Monopoly on Economic Ideas 1. Starting in the 1950's Milton Friedman challenges th ...
Milton Friedman
Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician and writer who taught at the University of Chicago for more than three decades. He received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy.Friedman's challenges to what he later called ""naive Keynesian"" (as opposed to Neo-Keynesian) theory began with his 1950s reinterpretation of the consumption function, and he became the main advocate opposing Keynesian government policies. In the late 1960s, he described his own approach (along with all of mainstream economics) as using ""Keynesian language and apparatus"" yet rejecting its ""initial"" conclusions. During the 1960s, he promoted an alternative macroeconomic policy known as ""monetarism"". He theorized there existed a ""natural"" rate of unemployment and argued that governments could only increase employment above this rate, e.g., by increasing aggregate demand, only for as long as inflation was accelerating. He argued that the Phillips curve was, in the long run, vertical at the ""natural rate"" and predicted what would come to be known as stagflation. Though opposed to the existence of the Federal Reserve System, Friedman argued that, given that it does exist, a steady, small expansion of the money supply was the only wise policy.Friedman actively participated in public debates over numerous policy issues; he was a major advisor to Republican U.S. President Ronald Reagan and Conservative British Prime Minister Margaret Thatcher. His political philosophy extolled the virtues of a free market economic system with minimal intervention. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment, and his support for school choice led him to found the Friedman Foundation for Educational Choice. In his 1962 book Capitalism and Freedom, Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and school vouchers.His ideas concerning monetary policy, taxation, privatization and deregulation influenced government policies, especially during the 1980s. His monetary theory influenced the Federal Reserve's response to the global financial crisis of 2007–08. Edward Nelson, the assistant director of the board of governors of the Federal Reserve System, argues, ""in important respects, the overall monetary and financial policy response to the crisis can be viewed as Friedman’s monetary economics in practice."" Friedman was among the strongest proponents of positivism in the social sciences. In the field of statistics, Friedman developed the sequential sampling method of analysis. He was also a mentor of and collaborator with Leonard Jimmie Savage. With George Stigler and others, Friedman was among the intellectual leaders of the second generation of Chicago price theory, a distinctive intellectual and methodological movement at the University of Chicago's Department of Economics, Law School, and Graduate School of Business from the 1940s onward. A large number of students and young professors that were recruited or mentored by Friedman during this period went on to become leading economists; they include Gary Becker, Robert Fogel, Ronald Coase, and Robert Lucas, Jr..Milton Friedman's own works include many monographs, books, scholarly articles, papers, magazine columns, television programs, videos, and lectures, and cover a broad range of topics of microeconomics, macroeconomics, economic history, and public policy issues. His books and essays were widely read, and have had an international influence, including in former Communist states. A survey of economists ranked Friedman as the second most popular economist of the twentieth century after John Maynard Keynes, and The Economist described him as ""the most influential economist of the second half of the 20th century ... possibly of all of it.""