MILTON FRIEDMAN AND THE ROAD TO MONETARISM:
A REVIEW ESSAY
George S. Tavlas
Bank of Greece and the Hoover Institution, Stanford University
The objective of Ed Nelson’s two-volume book, Milton Friedman and Economic Debate in the United States, 1932-1972, is to provide an account of Friedman’s views in major monetary-policy debates during the period identified in the book’s title. Nelson tells the story of the development of Friedman’s monetary framework, from its Keynesian origins in the early-1940s, to its gradual absorption of monetary factors in the late-1940s, and, finally, to its monetarist character of the 1950s and after, through the windows of a selection debates that engaged Friedman. At the same time, Nelson places Friedman’s monetary contributions within the context of the modern macroeconomics literature. In this essay, I consider doctrinal issues related to Nelson’s account of the development of Friedman’s monetarist framework.
Keywords: Milton Friedman, monetarism, Keynesian economics, New Keynesian model
JEL-Classification: B31, E51, E52
Acknowledgements: I thank Harris Dellas and David Laidler for very constructive comments. I am grateful to Maria Monopoli for excellent research assistance. The views expressed in this paper are those of the authors and do not necessarily reflect those of the Bank of Greece. All remaining errors are ours.
Bank of Greece
21 E. Venizelos Ave
Athens, 10250, Greece
Tel. no. +30 210 320 2370
Email address: email@example.com.