Milton Friedman

Milton Friedman

Milton Friedman was born on July 31ST in the year 1912; he was an American economist, statistician and author as well as a recipient of the Nobel Memorial Prize in economic science. In his early academic years he earned a degree in mathematics from Rutgers University, graduating in 1932 in the very midst of the great depression. After which he was interested in pursuing further studies in mathematics, but due to the dire state of the national economy he was inspired to pursue economics instead, which lead him to accept a scholarship from the University of Chicago where he completed his master program. Later, in 1937 Friedman joined the research staff of the National Bureau of Economic Research in New York City.

Friedman's studies of income from independent professional practice served as his doctoral dissertation for Columbia University, but publication was delayed due to the war .After the war Friedman's dissertation was finally published, and he was awarded his Ph.D. from Columbia University. The resulting book, Incomes from Independent Professional Practice introduced the concepts of permanent and transitory income. This study integrated with his previous work on consumer budgets, served as the basis for his 'Theory of the Consumption'.

After one year at the University of Minnesota, Friedman accepted an appointment at the University of Chicago, where he taught for the next 30 years, while maintaining a staff position with the Bureau of Economic Research

He was considered one of the major advocates for monetarism, which focused on the macroeconomic effects of the supply of money and central banking

He argued that excess expansion of the money supply is inherently inflationary and that monetary authorities should focus solely on maintaining price stability.

At the Bureau, Friedman conducted a long term study of the role of money in the business cycle. At the University, he established a Workshop in Money and Banking, which led a revival of interest in monetary studies in the United States. Friedman made a name as one of the University's exponents of neo-classical economics, opposed to the Keynesian economics then in favour at most universities in Europe and America. Friedman and his colleagues are regarded as monetarists; they saw money supply as the major determinant in the business cycle and inflation and regard it as the most effective instrument of government economic policy. Friedman recommended that central banks such as the Federal Reserve, adopt a general rule of controlling the money supply to suppress inflation and allow prices to find their natural level. He also argued that most other forms of government intervention in the economy are not only counterproductive but are fundamentally contrary to the values of a free society.

The success of his works with the