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How Friedman and Schwartz Became Monetarists

From: 14 Nov 2017 - 14:00 To: 14 Nov 2017 - 16:00

How Friedman and Schwartz Became Monetarists

Professor James Lothian, Fordham University, New York will be presenting a paper entitled: How Friedman and Schwartz Became Monetarists.

DEPARTMENT OF ECONOMICS VISITING SPEAKER SERIES

Professor James Lothian, Fordham University, New York will be presenting a paper entitled: How Friedman and Schwartz Became Monetarists.

 Date  Tuesday November 14                      
 Time   2:00 pm
 Venue   Room G1.37, Aras na Laoi, UCC
Abstract

In May 1942, Milton Friedman testified before the House Ways and Means Committee on the “Relation of Taxation to Inflation.” The word “money” appears nowhere in that transcript. The year before Friedman gave his testimony, Anna J. Schwartz and two co-authors finished an empirical study of economic growth and cyclical fluctuations in the United Kingdom. They completely downplayed the role of monetary factors in the business cycle. By the mid-1950s Friedman and Schwartz had not just become what later were called monetarists, the findings from their joint work defined the term. We trace these developments. The key factor underlying the change in Friedman and Schwartz’s views was what they learned from their study of U.S. historical experience and, in particular, their empirical confirmation of the Fed’s role in both initiating and deepening the Great Depression. Here, the influence of Clark Warburton on Friedman’s thinking on the Fed’s ability to offset the effects of banking crises appears to have loomed large and, possibly, on Friedman’s thinking about the monetary origins of the Depression. We then go on to discuss Friedman’s advocacy of the constant-money-growth rule as an outgrowth of his and Schwartz’s empirical research.

Biography

James R. Lothian is a distinguished professor of finance at Gabelli School of Business and holder of the Toppeta Family Chair in Global Financial Markets. He is director of Fordham's Frank J. Petrilli Center for Research in International Finance and, for two and a half decades, served as editor of the Journal of International Money and Finance.

All very welcome to attend.  

For more information, contact the Department of Economics

Photo by Fordam University