scholarly journals What was the message of Friedman’s Presidential Address to the American Economic Association?

2017 ◽  
Vol 42 (2) ◽  
pp. 523-541 ◽  
Author(s):  
James Forder
Keyword(s):  
Phillips Curve ◽  
Presidential Address ◽  
American Economic Association ◽  
Policy Rules ◽  
Economic Association

Abstract It is widely accepted that the importance of Friedman’s Presidential Address to the American Economic Association lies in its criticism of policy based on the Phillips curve. However, it is argued here that a reading of the text does not support such a view, and this and other considerations suggest that any such aim was far from Friedman’s mind in 1967. His objective was the quite different one of making a case for policy ‘rules’ rather than ‘discretion’.

scholarly journals The wrong track also leads someplace: Milton Friedman's presidential address at 50

2018 ◽  
Vol 6 (4) ◽  
pp. 517-532 ◽  
Author(s):  
Servaas Storm
Keyword(s):  
Phillips Curve ◽  
Presidential Address ◽  
Aggregate Demand ◽  
Financial Fragility ◽  
American Economic Association ◽  
Structural Forces ◽  
Long Run ◽  
Economic Association ◽  
The Right ◽  
Do So

Milton Friedman's presidential address to the American Economic Association holds a mythical status as the harbinger of the supply-side counter-revolution in macroeconomics – centred on the rejection of the long-run Phillips-curve inflation–unemployment trade-off. Friedman (seconded by Edmund Phelps) argued that the long run is determined by ‘structural’ forces, not demand, and his view swept the profession and dominated academic economics and macro policymaking for four decades. Friedman, tragically, put macroeconomics on the wrong track which led to disaster: secular stagnation, rising inequality, mounting indebtedness, financial fragility, a banking catastrophe and recession – and no free lunches. This is Friedman's legacy. We have to unlearn the wrong lessons and return macroeconomics to the right track. To do so, this paper shows that Friedman's (and Phelps's) conclusions break down in a general model of the long run in which productivity growth is endogenous – aggregate demand is driving everything again, short and long.

scholarly journals A NEGLECTED INCONSISTENCY IN MILTON FRIEDMAN’S AEA PRESIDENTIAL ADDRESS

2016 ◽  
Vol 38 (1) ◽  
pp. 105-112 ◽  
Author(s):  
James Forder
Keyword(s):  
Phillips Curve ◽  
Presidential Address ◽  
American Economic Association ◽  
Milton Friedman ◽  
Economic Association

Milton Friedman (1968)—his famous Presidential Address to the American Economic Association—contains an elementary error right at the heart of what is usually supposed to be the paper’s crucial argument. That is the argument to the effect that during an inflation, changing expectations shift the Phillips curve. It is suggested that the fact of this mistake and of its having gone all but unnoticed are points of historical interest. Further reflections, drawing on the arguments of Forder (2014), Macroeconomics and the Phillips Curve Myth, are suggested.

The role of financial policy

2018 ◽  
Vol 6 (4) ◽  
pp. 446-460 ◽  
Author(s):  
Roger E.A. Farmer
Keyword(s):  
Financial Markets ◽  
Economic Activity ◽  
Presidential Address ◽  
Central Banking ◽  
Financial Policy ◽  
American Economic Association ◽  
General Equilibrium Theory ◽  
Economic Association ◽  
Monetary Rules

I review the contribution and influence of Milton Friedman's 1968 presidential address to the American Economic Association. I argue that Friedman's influence on the practice of central banking was profound and that his arguments in favour of monetary rules were responsible for 30 years of low and stable inflation in the period from 1979 through 2009. I present a critique of Friedman's position that market economies are self-stabilizing and I describe an alternative reconciliation of Keynesian economics with Walrasian general equilibrium theory from that which is widely accepted today by most neoclassical economists. My interpretation implies that government should intervene actively in financial markets to stabilize economic activity.

scholarly journals Explaining the fame of Friedman’s Presidential Address

2019 ◽  
Vol 43 (6) ◽  
pp. 1683-1700 ◽  
Author(s):  
James Forder ◽  
Kardin Sømme
Keyword(s):  
Presidential Address ◽  
American Economic Association ◽  
Close Attention ◽  
Economic Association ◽  
Terminological Confusion ◽  
Do So

AbstractIt is noted that although in fact it lacks the revolutionary content commonly ascribed to it, Friedman’s Presidential Address to the American Economic Association is very highly regarded as an original and formative contribution. It is argued that close attention to the literature shows that it was not initially seen as original, and only after an interval of five years did the idea of its revolutionary status retrospectively, but suddenly become widely accepted. The explanation of this change of view is considered. Four explanations are suggested: one involving terminological confusion, one involving a change in theoretical priorities, and two involving debates of the 1970s, which, although they did not in fact do so, appeared to build on Friedman’s presentation, and by this appearance gave it an undeserved stature.

The Road We are Traveling

1972 ◽  
Vol 32 (1) ◽  
pp. 3-14 ◽  
Author(s):  
Ralph W. Hidy
Keyword(s):  
Economic History ◽  
Presidential Address ◽  
Empirical Testing ◽  
American Economic Association ◽  
The Road ◽  
Economic Association

On this occasion it seems wise to take a leaf from Wassily W. Leontief's book as President of the American Economic Association. He discussed a problem of his organization. His presidential address was a plea for economists to limit their creation of models, especially those difficult of empirical testing, and to test some of those susceptible of verification. My remarks will also deal with a problem, one in the Economic History Association, how it came about, and what we might do about it.

scholarly journals Retrospectives: Cost-Push and Demand-Pull Inflation: Milton Friedman and the “Cruel Dilemma”

2018 ◽  
Vol 32 (1) ◽  
pp. 195-210 ◽  
Author(s):  
Johannes A. Schwarzer
Keyword(s):  
Phillips Curve ◽  
Full Employment ◽  
Presidential Address ◽  
The Other ◽  
Price Stability ◽  
Inflation Expectations ◽  
Milton Friedman ◽  
Economic Association ◽  
Policy Objectives ◽  
The 1950S

This paper addresses two conflicting views in the 1950s and 1960s about the inflation-unemployment tradeoff as given by the Phillips curve. Many economists at this time emphasized the issue of a seemingly unavoidable inflationary pressure at or even below full employment. In contrast, Milton Friedman was convinced that full employment and price stability are not conflicting policy objectives. This dividing line between the two camps ultimately rested on fundamentally different views about the inflationary process: For economists of the 1950s and 1960s cost-push forces are responsible for the apparent conflict between price stability and full employment. On the other hand, Friedman, who regarded inflation to be an exclusively monetary phenomenon, rejected the notion of ongoing inflationary cost-push pressures at full employment. Besides his emphasis on the full adjustment of inflation expectations, this rejection of cost-push theories of inflation, which implied a decoupling of the two previously perceived incompatible policy objectives, was the other important element in Friedman's attack on the Phillips curve tradeoff in his 1967 presidential address to the American Economic Association.

Book Reviews

2011 ◽  
Vol 49 (3) ◽  
pp. 751-753 ◽  
Keyword(s):  
Public Policy ◽  
Consumer Good ◽  
Campus Culture ◽  
American Economic Association ◽  
American Universities ◽  
Economic Association ◽  
Commercial Enterprise ◽  
Duke University

John J. Siegfried of University of Adelaide and American Economic Association reviews “Big-Time Sports in American Universities” by Charles T. Clotfelter. The EconLit Abstract of the reviewed work begins “Examines the phenomenon of prominent, commercialized university-sponsored athletic enterprises and considers the consequences for the universities that operate them. Discusses strange bedfellows; priorities; the bigness of “big time;” consumer good, mass obsession; commercial enterprise; an institution builder; a beacon for campus culture; ends and means; and prospects for reform. Clotfelter is Z. Smith Reynolds Professor of Public Policy and Professor of Economic and Law at Duke University. Index.”

Sign in / Sign up

Export Citation Format

Share Document