Working Paper: NBER ID: w24043
Authors: N. Gregory Mankiw; Ricardo Reis
Abstract: This essay discusses the role of Milton Friedman’s presidential address to the American Economic Association, which was given a half century ago and helped set the stage for modern macroeconomics. We discuss where macroeconomics was before the address, what insights Friedman offered, where researchers and central bankers stand today on these issues, and (most speculatively) where we may be heading in the future.
Keywords: macroeconomics; monetary policy; Friedman
JEL Codes: E5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Friedman's theories (E65) | macroeconomic thought (B22) |
| Friedman's assertion of natural rate of unemployment (J64) | natural rate hypothesis (E43) |
| Friedman's focus on expectations (D84) | rational expectations revolution (D84) |
| Friedman's warnings about limitations of monetary policy (E19) | consequences during 1970s stagflation (E65) |
| shift from Keynesianism to Friedman’s monetarism (E65) | developments in macroeconomics (B22) |