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Working Paper 2007-048D

"The Impact of Milton Friedman on Modern Monetary Economics: Setting the Record Straight on Paul Krugman’s 'Who Was Milton Friedman?'"
by Edward Nelson, and Anna J. Schwartz

Paul Krugman’s essay “Who Was Milton Friedman?” seriously mischaracterizes Friedman’s economics and his legacy. In this paper we provide a rejoinder to Krugman on these issues. In the course of setting the record straight, we provide a self-contained guide to Milton Friedman’s impact on modern monetary economics and on today’s central banks. We also refute the conclusions that Krugman draws about monetary policy from the experiences of the United States in the 1930s and of Japan in the 1990s.

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Category > Monetary Policy/Macroeconomics
Author > Edward Nelson
Research Papers and Publications: JEL Code > E31
Research Papers and Publications: JEL Code > E51
Research Papers and Publications: JEL Code > E58