How Milton Friedman and Edmund Phelps changed macroeconomics
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.