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An initial ‘Keynesian illness’? Friedman on taxation and the inflationary gap

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  • Enrico Sergio Levrero

Abstract

This paper examines Friedman’s writings in the years 1941–43 and compares them with those after the war with a view to assessing differences and similarities. Albeit a first assessment, Friedman’s claim that he was suffering from a ‘Keynesian illness’ in his ‘Washington phase’ appears to have been less ‘serious’ and deep than he himself feared, although he was to some extent influenced by the ‘prevailing Keynesian temper of the time’.

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  • Enrico Sergio Levrero, 2018. "An initial ‘Keynesian illness’? Friedman on taxation and the inflationary gap," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(5), pages 1219-1237.
    • Handle: RePEc:oup:cambje:v:42:y:2018:i:5:p:1219-1237.
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    1. George S. Tavlas, 1998. "Was the Monetarist Tradition Invented?," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 211-222, Fall.
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    6. Henry C. Simons, 1936. "Rules versus Authorities in Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 44, pages 1-1.
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    More about this item

    Keywords

    Friedman; Inflationary gap; Price inflation; Spending tax; Quantity theory of money;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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