What ideas or theories of Milton Friedman's helped to advance economics?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Milton Friedman is the modern economist most closely connected to the idea of monetarism.  His ideas were instrumental in bringing monetarism back into the mainstream of economic thought, particularly among conservative economists.

Friedman is best known for opposing Keynesian economics and arguing instead for the importance of the money supply.  Friedman advocated the idea that the government should not try to manipulate the economy through fiscal policy.  Instead, he said, the government should have a fairly automatic monetary policy in which the money supply increased by a constant amount each year.  Friedman believed that this would allow businesses to know what was coming, thus reducing uncertainty.  The government would then stay out of the way and let the free market cause economic growth.

These ideas of Friedman's came to be prominent in conservative economic circles.  They provided an alternative to the then-dominant Keynesian economics.  In that sense, they helped to advance the study of economics.  Please follow the econlib.org link below for a detailed discussion of Friedman's work.

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