How Milton Friedman and Edmund Phelps changed macroeconomics4 min read . Updated: 23 Apr 2018, 04:52 AM IST
None of the contemporary debate would have been possible without the googly that Milton Friedman and Edmund Phelps threw at the economics profession
Last month marked the half-century of one of the most important academic articles written in macroeconomics in the post-war period. Economist Milton Friedman’s The Role Of Monetary Policy, published in March 1968, threw a stick of dynamite under the edifice of naive Keynesian economics. An article written the same year by economist Edmund Phelps constituted an additional surgical strike, and, taken together, the Friedman-Phelps fusillade would leave macroeconomics forever changed. Both economists would win well-deserved Nobel prizes, in part for their seminal 1968 work. Indeed, along with Robert Mundell, also a Nobel prize-winning economist, this trio comprises probably the greatest macroeconomists of the second half of the last century.