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What Would Milton Friedman Have Thought of the Great Recession?

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  • Scott Sumner

Abstract

Milton Friedman died in , right before the onset of the Great Recession. Unfortunately, we will never know how Friedman would have interpreted this event. However, we can draw some inferences from his published views on the Great Depression, as well as his views on more recent monetary policy, especially in Japan. It seems likely that Friedman would have blamed the Fed for insufficiently expansionary monetary policy during 2008 and 2009, a view that is quite different from the conventional conservative interpretation of events.

Suggested Citation

  • Scott Sumner, 2015. "What Would Milton Friedman Have Thought of the Great Recession?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 74(2), pages 209-235, March.
    • Handle: RePEc:bla:ajecsc:v:74:y:2015:i:2:p:209-235
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    File URL: http://hdl.handle.net/10.1111/ajes.12097
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    References listed on IDEAS

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    1. Eichengreen, Barry, 1996. "Golden Fetters: The Gold Standard and the Great Depression, 1919-1939," OUP Catalogue, Oxford University Press, number 9780195101133.
    2. David Laidler, 2013. "Reassessing the Thesis of the Monetary History," University of Western Ontario, Economic Policy Research Institute Working Papers 20135, University of Western Ontario, Economic Policy Research Institute.
    3. Friedman, Milton, 1975. "25 Years after the Rediscovery of Money: What Have We Learned? Discussion," American Economic Review, American Economic Association, vol. 65(2), pages 176-179, May.
    4. Bernanke, Ben S, 1995. "The Macroeconomics of the Great Depression: A Comparative Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(1), pages 1-28, February.
    5. Robert E. Hall, 2010. "Why Does the Economy Fall to Pieces after a Financial Crisis?," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 3-20, Fall.
    6. J. Bradford De Long, 2000. "The Triumph of Monetarism?," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 83-94, Winter.
    7. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, January.
    8. Sumner, Scott, 1989. "Using Futures Instrument Prices to Target Nominal Income," Bulletin of Economic Research, Wiley Blackwell, vol. 41(2), pages 157-162, April.
    9. Lars E. O. Svensson, 2003. "What Is Wrong with Taylor Rules? Using Judgment in Monetary Policy through Targeting Rules," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 426-477, June.
    10. Glasner,David, 2005. "Free Banking and Monetary Reform," Cambridge Books, Cambridge University Press, number 9780521022514, Enero-Abr.
    11. Sumner, Scott, 1991. "The Equilibrium Approach to Discretionary Monetary Policy under an International Gold Standard, 1926-1932," The Manchester School of Economic & Social Studies, University of Manchester, vol. 59(4), pages 378-394, December.
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    Cited by:

    1. Raffinot, Thomas, 2017. "Interest-Rates-Free Monetary Policy Rule," Working Papers 06898, George Mason University, Mercatus Center.
    2. Maciej Ryczkowski, 2026. "Zygmunt Narski, Milton Friedman, and modern monetary policy," International Economics and Economic Policy, Springer, vol. 23(1), pages 1-25, February.

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