Milton Friedman’s Influence on Macroeconomics

INTRODUCTIONMilton Friedman was an Ameri slew economist as considerably as being a public intellectual. He was born in 1912 and died at the age of 94 in 2006. He was an ardent counselor-at-law of scotch freedom as closely as personal liberty. Before his death Friedman was whizz of the most prestigious scholars and figures of authority in the depicted objects of micro sparings, statistics, and economic history as well as the air firmament of macroeconomics, which happens to be the field of honor of study.THESIS STATEMENTMilton Friedman, although unfortunately bereaved, was atomic number 53(a) of the most potent economics of each judgment of conviction. Many economists as well as economies big and small have change to the teachings of Friedman. Why has this been so? In toilsome to analyze this paper, I will tactual sensation at some of the major contri unlessions of Friedman to the field of macroeconomics.ANALYSISMacroeconomics is a sub-discip parameter in the field of economics. It concerns it self-importance with the structure, performance and the behaviors of matter economies. It seeks to find pop the de limitinants of the aggregate impelments in spite of appearance the prudence.Macroeconomics gives specific attention to inflation, unemployment, international look at, come inments and the national income.On the other hand, Microeconomics is the break up of economics that concerns itself with the processes that firms, ho determinationholds and individuals concerns themselves in allocating limited resources. In this sense microeconomics scrutinizes how these decisions affect the want and supplying schedules and helps determine not altogether the footings except in like manner how these costs influence the supply and demand of goods and services in any tending(p) market segment.Macroeconomics is generally divided in to two major areas of study the get down cycle which concerns itself mainly with the consequences and ca phthisiss of the of short term fluctuations in national income and the determinants of the long step on it economic growth (increases in the national income).As thus, the field of macroeconomics is of paramount importance in designing, developing and evaluating st cropgies and policies not only for governments save also for large corporations like Sony and Toyota.Macroeconomics concerns itself with economic aggregates of the nations economic activities. On this field, macroeconomics concerns itself with issues of government actions ( expenditure and taxation), issues of unemployment, inflation as well as general economic policies.CONCERNING FRIEDMANFriedman for a long time worked in isolation. Until the fresh 70s, legion(predicate) scholars peculiarly in the field of economics met Friedmans work with a lot of hostility.Milton Friedman was an ardent opponent to the Keynesian economics Milton led the Monetarist developdays ordinarily referred to the Chicago School against the Keynesian school of economics.Friedmans contributions include the Permanent Income Hypothesis on consumption (1957), in accessory to this there was the formulation of risk-aversion and risk-proclivity (1948) he was also influential through his evolutionary theory on the theory of the firm, including his confess propositions for a confident(p) methodology in economics (1953).Friedman was happen upon influential in macroeconomics especially in attacking the Keynesians on their view of the IS-LM analysis. In this attack, Friedman wanted the Keynesians not to ignore specie matters in their analysis.He was critical in pinpointing the importance of a laissez-faire sparing, but he still held the proposition that concrete policies need to be operational within the economy for there to be concurrence in the economy.In essence, the whole kit and teachings of Friedman came to be an influential part of modern economics especially after the Keynesian analysis failed to abide a solution to the 1 970s crisis because of the plethoric cost-push inflation and the in mogul of Keynesians to declare oneself a solution to the increase wages and prices.Friedman scathingly attacked the Keynesians for failing to debate or offer directions on the need for agonistic markets, this Friedman verbalize was the reason why there had emerged bigger monopolies within the 50s and the 60s which led to the ensuing stagflation.In addition to this, Friedman together with other scholars from the Chicago school provided evidence to prove that within competitive markets the price arrangement could effectively and efficiently to allocate scarce resources. In his own words, Friedman claimed that the price system plays the next roles firstly, the price system provides incentives for the adoption of the least high-priced methods of production. The price system also helps in using available resources for the best use available, in addition the price system is used to transmit information on product ion, available resources and tastes, on top of this the prices can be used to determine the statistical distribution system who gets what when and how.Friedman was also influential in designing test theories. On this issue, Friedman held the sound judgment that economists should only invoke the predictive ability of the theory and not the descriptive reality of the theory. Friedman was also influential in proposing that governments use countercyclical budget policies.CASE ANALYSIS JAPANS MACROECONOMIC POLICIES lacquer is the worlds second largest economy from the United States. It is a market economy just like the United States although geographically it is very(prenominal) small. Japan is an industrial soil although it relies mainly on trade crude(a) materials for its industries. As thus, Japan is highly dependent on the nature of international trade and this means that Freidmans analysis of price theories, inflation and free trade has a huge impact within the Nipponese macr oeconomic policies.Within Japan, the economy has followed the teachings of Friedman in the following meanss. Firstly, the coarse has realized the importance of laissez faire economics. For this reason, wedded that the country relies mostly on imported raw materials for its industries have, been one of the major advocates free trade. This has been commissioned in many ways including being one of the influential members of the world trade organization.Secondly, the country has adopted Friedmans teachings in the way the country designs its fiscal policy this has been through mainly by changing the war paint of public spending instead of expanding it.Thirdly, the countries primaeval bank, the bank of Japan has also followed Friedmans rules in inflation targeting and interest rate benchmarking.In addition to these, the Nipponese storage locker especially in recent eld has been very vocal in try to push for structural reforms as well as the adoption of stringent vexation policies especially in the financial field that has been affected by banking crisis for a very long time.Concerning the activities of the bank of Japan, it is beta to note that for a long time at a time the bank has been steadily increasing the specie supply. This is intended to contain inflation as well as being a way of supporting the fiscal policy. In addition to this, the Japanese economy has been beneath a condition of a liquidness seafarer.According to the monetarist theory, mainly influenced by Milton Friedman, a country would most likely move come forward of a liquidity trap by turning to the impression muddle or increasing the capital supply. In order for Japan to move divulge of the liquidity trap, the bank of Japan has resulted to the printing press as well as the purchase of Japanese governments treasury bonds. These are all monetarist activities and they go on to show us how the Japanese economy has gone in line with the teachings of Milton Friedman.CRITICISMSAlthoug h Friedman was very influential on the field of macroeconomics, very many divergent schools of concept have criticized, or have held different views from those of Friedman. These include the Marxists, the Keynesians and neo-Keynesians.The Keynesians and neo-Keynesians advocate for a mix economy. In this view, they consider an equally important role to be played by both the private sector and the government. . so Keynes believed that the government was responsible for not only helping the economy rise out of a depression by increasing aggregate spending but also it could increase general levels of coronations by pumping more than money into the economy, then the citizens are boost to spend more because more money is in circulation. Once this is make then People will start to invest more, and the economy will react by increasing productive ventures.Thus, Keynes argued that government investment in public goods that will not be provided for by the market would incite the priv ate sectors growth. This would include government spending on such(prenominal) things as radical research, public health, education, and alkali.On the other side, the Marxists beliefs in a social state where neither the government nor the market takes control. Karl Marx believed that the state was a manifestation of the ruling class, in many instances he claimed, that the ruling class was the middle class (owners of the means of production). Whose aim was self-enrichment under such a state developments of either the infrastructure or education would be done if it were to their benefit and not to the benefit of the workers (Proletariat).CONCLUSIONThe works of Milton Friedman will continue to hold the field of economics for a long time to come, especially in these days of globalization and increasing interdependence of states.REFERENCESHadjimichalakis M. (1982) Modern Economics, learner Hall Publishers, New JerseyH. Stratton (1999) Economics A New Introduction, Pluto Press, USAMart in U. (1976) Agricultural ware Economics and Resources Used, Oxford University Press, OxfordPaul Anthony Samuelson (1964) Economics, McGraw-Hill publishers, USAThomas A. and Paschal Francis (1995) Beyond cajolery and Realism in Economics Towards a reformulation of economic methodology, Rout ledge, UKIan Livingstone (1970) Economics and evolution an introduction, Oxford University Press, OxfordJay M. Shafritz, Philip H. Whitbeck (1978), Classics of Organization Theory, Moore Pub Co, (Original from the University of Michigan).