MILTON
FRIEDMAN
Contributions to Economics
and Public Policy
Edited by
ROBERT A. CORD
and
J. DANIEL HAMMOND
OXFORD UNIVERSITY PRESS CONTENTS
List ofFigures List of Tables Notes on Contributors
Introduction ROBERT A. CORD AND J. DANIEL HAMMOND
PART I REFLECTIONS ON FRIEDMAN
1. Milton Friedman as Teacher and Scholar ROBERT E. LUCAS, JR.
2. Milton Friedman: An Appreciation ARNOLD C. HARBERGER
3. Remembering Milton Friedman GREGORY C. CHOW
4. The Place of Milton Friedman in the History of Economic Thought BENNETT T. MCCALLUM
5. Milton Friedman's Public Life after Retirement, 1976-88 ALLAN H. MELTZER
PART II MONETARY THEORY AND POLICY
6. Milton Friedman as an Empirical Modeler NEIL R. ERICSSON, DAVID F. HENDRY, AND STEDMAN B. HOOD
7. Milton Friedman and US Monetary History MICHAEL D. BORDO
8. Reflections on Friedmans Macroeconomics RICHARD SELDEN VÜi CONTENTS
9. Reflections on Milton Friedman, the South during the Civil War, and Current Events EUGENE LERNER
10. Milton Friedman's Monetary Economics: Theory and Empirics 178 JAMES R. LOTHIAN
11. Friedman, Chicago, and Monetary Rules 198 HARRIS DF.T.I.AS AND GEORGE S. TAVIAS
12. Why and How Should a Monetary Economy be Stabilized? The Forgotten Lessens of Milton Friedman 217 SYLVIE RIVOT
13. Friedman's Characterization of the Natural Rate of Unemployment 236 K. VELA VELUPILLAI
14. What Would Milton Friedman Have Thought of Market Monetarism? 246 SCOTT B. SUMNER
15. Friedman and Divisia Monetary Measures 265 WILLIAM A. BARNETT
16. Arthur Burns and Milton Friedman: Why did the Master (Bums) and the Disciple (Friedman) Understand Inflation in a Diametrically Opposed Way? 292 ROBERT L. HETZEL
17. Milton Friedman and the Federal Reserve Chairs in the 1970s 313 EDWARD NELSON
18. Monetary Targeting in Australia: Problems of Control and Prediction 334 SELWYN CORNISH
19. Milton Friedman, the Quantity Theory, and Hyperinflation in Russia 356 VINCENT BARNETT CONTENTS ix
PART III CONSUMPTION THEORY, FISCAL POLICY, AND PUBLIC POLICY
20. Friedman's Theory of Income and Consumption, Then and Now 377 JOHN J. SEATER
21. Milton Friedman's Contributions to Fiscal Economics 401 MICHAEL J. BOSKIN
22. Friedman and the Income Effects of Financing Government Deficits 417 ROBERT D. AUERBACH
23. Milton Friedman and the Finance of Higher Education 436 NICHOLAS BARR
24. Milton Friedman, Drug Legalization, and Public Policy 464 MARK THORNTON
25. Milton Friedman and Occupational Licensing 480 MORRIS M. KLEINER
26. Slaves or Mercenaries? Milton Friedman and the Institution of the All-Volunteer Military 499 JOHN D. SINGLETON
27. Straining the Social Bond: Government Policy versus Social Custom in Capitalism and Freedom 523 PAUL TURPIN
PART IV METHODOLOGY
28. Reading and Misreading Friedman's 1953 Methodology Essay 541 LAWRENCE A. BOLAND
29. Milton Friedman's Methodology, Macroeconomics, and the Great Recession 561 PATRICK MINFORD
30. Milton Friedman: A Bayesian? 575 GERALD P. DWYER
31. Friedman and the Cowles Commission 585 MARCEL BOUMANS X CONTENTS
PART V FRIEDMAN AND OTHER ECONOMISTS
32. How Friedman Became the Anti-Keynes 607 CRAIG FREEDMAN, G. C. HARCOURT, PETER KRIESLER, AND J. W. NEVILE
33. The Economics and Political Economy of Milton Friedman: An Old Keynesian Critique 631 THOMAS I. PALLEY
34. Friedman and his Collegial Detractors 657 RUSSELL S. BOYER
35. Milton Friedman and George J. Stigler: Early Interactions and Connections 680 J. DANIEL HAMMOND
36. Friedman and the Austrians 703 ROGER W. GARRISON
37. Milton Friedman, James Buchanan, and Constitutional Political Economy 727 PETER J. BOETTKE AND ROSOLINO CANDELA
38. Friedman and Robbins 741 SUSAN HOWSON
39. Friedman and Viner 757 DOUGLAS A. IRWIN
40. Economists as Forecasters: Milton Friedman and Paul Samuelson, 1970-4 774 ROBERT A. CORD
Index 799