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Milton Friedman RIP
"DSK" wrote in message ... Pay the debt with inflated currency. When the debt is one of the drivers of inflation, how is inflation going to oustrip debt? Isn't this like putting the cart before the horse? Gilligan wrote: Germany in the 1920's. Simply turn on the printing presses and devalue the currency. Good example. Did it work out in the end? This thread got side tracked somehow. What I started out to say, for 1 ASA/economist point, can anybody answer what economic theory did Friedman produce? 2 points if you can explain it. Gilligan wrote: I don't think he produced any new economic theory but rather contributed deeper understanding and refinement to old ones. DSK wrote: AFAIK he definitely invented something new, but five or six minutes of googling has failed to produce a reference to it, unless you already know the specific term. Gilligan wrote: Don't you know it? Yes: velocity Friedman's work was key in measuring various inputs to the money supply, quantifying the trend in velocity, and stabilizing inflation. http://www.mises.org/story/918 He didn't come up with any new theories. He refined old ones. Actually, I thought he did, but with further research (more than I really have time for today) I'm beginning to think you're right. ... Have you ever read "Human Action" by Ludwig von Mises? No have you? Yes .... He was a founder of the Austrian school of economics, a predecessor of the Chicago school which laid a good deal of the ground work. http://en.wikipedia.org/wiki/Ludwig_von_Mises Never heard of the man before now. Looks like pretty interesting stuff, thanks for the reference. Just to make sure, I went back to my old textbook, which does indeed say that Milton Friedman invented the concept of velocity, as applied to quantifying the money supply. However, after digging around quite a lot (interesting reading but I have a lot of other things that I should be doing instead right now), I don't think he did invent the concept of velocity. http://www.unc.edu/depts/econ/byrns_...les/fisher.htm In any event, Friedman was the first to reliably use numbers from the real world to show how the money supply related to changes in GNP, employment, and inflation, which is something that economists had pretty much given up on. Dr. Friedman's work... and economic history since... has been the basis of relatively stable economic order; ironically it also shows the desirability of disconnecting monetary policy from political influence, which is something else the neo-conservatives ignore when trumpeting Friedman. OK, back to real work, dammit! DSK |
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