Moldavian State University

Department of Economic Sciences

COURSE WORK

on the history of economic exercises, on the topic:

« Milton Friedmen.»

Performed: 2nd year student,

groups 19-1 Peeva Veronica

Checked:

Chisinau 2002.

Introduction

1. Milton Friedman. Brief description of the biography.

2. Monetarist economy recipes recipes

3. Criticism Milton Friedman International Monetary Fund

References

Introduction

Milton Friedmen American economist, laureate Nobel Prize In the economy of 1976, awarded "for research in the field of consumption, history and theory of money."

The name of M. Frydman - the Nobel laureate in modern economic theory is associated, as a rule, with the leader of the Chicago Monetary School and the main opponent of the Keynesian concept state regulation Economy.

M. Frydman in his work is multifaceted and, which is very important, its scientific interests also cover the field of methodology economic Science.

1. Milton Friedman.

Brief description of the biography.

Milton Friedman.

Milton Friedman was born on July 31, 1912 in New York in the family of immigrants from Eastern Europe. Soon after his birth, the family moved to the city of Rahuway (New Jersey). Mother worked in a haberdashery store, and his father, as the Friedman recalled more than later, "I unsuccessfully tried to achieve results in hopeless trade operations"The family had small and non-permanent income and could not get out of need.

At the age of 16, Milton Friedman on a competitive selection was adopted at the University of Rutheger with the right to receive a partial scholarship.

In 1932, he was awarded a bachelor's degree in two disciplines - economics and mathematics. Specialization in the field of economy M. Friedmen continued in the University of Chicago. Having received a master's degree in the University of Chicago in 1933, Friedman moved to postgraduate internships in Columbia University (New York).
At the end of 1934, he begins to work in the University of Chicago Assistant-researcher. In the summer of 1935, M. Friedmen took part in a large-scale project of consumer budget research for the National Committee on natural resources USA.

During World War II, Friedmen participates in the development of tax policies on the task of the Ministry of Finance, conducts research on military statistics.

In 1945_1946 He teaches the economy in the Minnesota University. Then M. Friedmen returns to the University of Chicago and becomes a professor assistant in economics, remaining in this position and today.

With the assistance of the NBEI, Friedman begins to work for many years to work on the creation of monetary theory. Its subsequent contribution to the theory and practice of economic science is accompanied by receiving unexpected results, it becomes a fruitful researcher, manages the so-called. "Chicago school" economists.

In 1950, he has been working in Paris by the Consultant for the implementation of the Marshall Plan, which provided for the restoration of the destroyed war of the economy of Western Europe. In his book "Theory of consumption function", published in 1957, M. Friedmen formulated and substantiated his theory of "constant consumption revenue."

In 1951, Friedmen was awarded the Medal of John Beits Clark American Economic Association.

In 1956, under his edit, a collection of articles "Research in the field of quantitative theory of money" is published.

In 1963, Friedman publishes written together with Anna Schwartz Fundamental Labor "Formation monetary system US. "In this book, he defends his position, according to which in long-term periods, major changes in economic life are connected primarily with the money supply and its movement." The economy dances under the dollar duffed, repeats the dance of the dollar "- so thinks M. Frydmen. All the largest economic shocks, including the Grand Crisis of 1930, are explained by the Friedmen consequence of monetary policy, and not instability market economy. According to Friedman, the influence of money on economic activity is not an external (exogenous) factor of the economy, but, most likely, on the contrary - an internal (endogenous) factor. Following the monetarist school, he considers the demand for money by one of the most important economy contemplates. Friedmen monetary concept, saying the words of the American economist G. Ellis, led to the "re-opening of money" because of almost everywhere growing, especially in the last period, inflation.

Friedman's views on the importance of non-interference of the state in economic policies were widely known thanks to his book "Capitalism and Freedom" (1962) and regular publications in the column of magazine "News of News" (starting from 1966).

In 1967, M. Friden was elected by the President of the American Economic Association.

In 1969-1973 He was an adviser on economic issues of US President Richard Nixon. He deserved recognition as an adviser to President Richard M. Nixon, despite his discrepancies with him on the issue of establishing rigid price level control and wages In 1971, F.'s views on the importance of non-interference of the state in social policy were widely known thanks to the regular publications in the "News-Week" column ("News-week"), as well as thanks to the earlier publication of the book "Capitalism and freedom "(" Capitalism and Freedom ", 1962). Its popular book "Freedom of choice" ("Free to Choose", 1980) even gave the name of the television saver of the cycle of their conversations on social and economic issues.

In 1976, Milton Friden was awarded the Nobel Prize for Economics "for achievements in the field of consumption analysis, history cash circulation and the development of monetary theory, as well as for the practical show of the complexity of the economic stabilization policy. "

In the Nobel lecture, he returned to the topic, touched back in 1967 when applying to the American Economic Association, - to the denial of Keynes's noticeable remarks between the rate of inflation and unemployment. He came to the conclusion that at a long interval, the Phillips curve still shifts up under the condition of natural growth of unautability.

In his opinion, the cause of such a phenomenon was the adoption of an increase in unautability as an increasing parameter instead of interpretation of its constant numerical constant. For the short-term interval, in his opinion, the inflationary monetary-fiscal policy could only temporarily reduce the unemployment rate, since workers and corporations in habit are striving to increase the level of income, which ultimately cannot but promote growth in price levels (and, accordingly, growth unemployment).

Despite the fact that many views M. Fridman on economic theory and state policy They are considered controversial, he, as the English economist John Barton expressed himself, "provided us with the foundation for future research on macroeconomics."

In 1977, M. Friedmen left the University of Chicago, in which he taught for many years, and began to work as a senior researcher of the Guteov Institute at Stanford University in California.
In 1980, his book "Freedom of choice" was published in 1980, which gave the name of the cycle on television conversations on social and economic issues.

In 1981-1984 M. Friedmen was an economic adviser to US President Ronald Reagan.

Milton Friedman was awarded the honorable training degrees of many American and foreign universities and academies.

M.Fridmen in his work is multifaceted and, which is very important, its scientific interests cover the area of \u200b\u200bthe methodology of economic science. For many years, economists have not been fulfilled in their discussions on this problem without analyzing the Friedmen essay "Methodology of Positive Economic Science" (1953), As well as without an essay on a similar topic, written by L. Babinis (1932), R. Yailbroner (1991) and M. Alle (1990), or the famous lecture, read by P. Samuelson at the presentation ceremony of the Nobel Prize in the economy (1970 ), and etc.

However, it is from the positivistic methodological essay of M. Frydman that an extraordinary judgment can be ascended that economic theory as a totality of meaningful hypotheses is accepted when the actual data can "explain" actual data, only follows whether it is "correct" or "erroneous" and Whether it will be "accepted" or "rejected"; In turn, the facts can never "prove with a hypothesis", as they are able to establish only its erroneousness. At the same time, its solidarity is obvious with those scientists who consider unacceptable to represent economic theory describing, and not predictive, turning it into simply disguised mathematics. According to M. Frydman, to argue about the diversity and complexity of economic phenomena, means to deny the transitional nature of knowledge enclosing the meaning scientific activityAnd therefore "any theory with necessity is transient and subject to change with the progress of knowledge." At the same time, the process of detecting something new in a familiar material concludes the Nobel laureate, it is necessary to discuss in psychological, and not logical categories and, studying autobiography and biographies, stimulate it with the help of aphorisms and examples

2. Milton Friedman:

monetarist recipes

improvement of the economy.

What is monetarism? What are his postulates, reasons for influence?

Monetary means money (Money - money, Monetary - money). By definition of Bernard Iva and Collie Jean-Claude, monetarism is the course of economic thought, which has a decisive role in the oscillatory movement of the economy. Monetarism - science not only about money. The focus of representatives of this school are monetary categories, monetary instruments; However, they are not just not just a monetary mechanism, banking system, monetary policy, currency relations. Monetarists consider these processes to identify the connection between the money supply and production volume. In their opinion, banks are a leading instrument of regulation, with the help or with the direct participation of which changes in the money market are transformed into changes in the market of goods and services.

Milton Friedman is an outstanding American economist of the 20th century, the laureate of the Nobel Prize in the field of economy, a supporter of classical liberalism, the creator of "monetarism". Friedman was also a doctor of philosophy at Columbia University and the President of the American Economic Association. He was born on July 31, 1912 in the Brooklyn area in New York in the family of Jewish emigrants.

At the age of 20 she graduated from Rutheger, and then Chicago Universities and became a bachelora in economics and mathematics. Until 1935, he worked at the University of Chicago as an assistant researcher, after which he went to work in the National National Resource Committee of the country. In 1937 began to cooperate with the National Bureau economic research. There he met Simon Kuznets, who later wrote a research work about income from private practice. This work has become his doctoral dissertation. In 1941, Milton Friedman was proposed post in the US Department of Finance.

During World War II, he was Deputy Director of the Statistical Studies Group at Columbia University. Immediately after the war, returned to the University of Chicago, where he received a degree of a doctor and worked as a professor of the economy. In 1950, he performed in Paris with a lecture in defense of floating exchange rates, while predicting the collapse of fixed exchange rates, which happened to the European economy in the 1970s. In 1976, Friedman was awarded the Nobel Prize for merit in the field of economics. In November 2006, as a result of a heart attack, he died in California. Many Friedman works are written in conjunction with his wife Rose, which, as well as he was an economist.

Milton Friedman (Milton Friedman) (07/31/1912 - 11/16/2006) - American economist, public figure, laureate of the Nobel Prize in Economic Sciences.

Among scientists, he is mostly known for its theoretical and empirical studies, especially on the analysis of consumption, monetary history and theory, as well as for its demonstration of the complexity of stabilization policy. The world community followed its confirmation of political philosophy, which insists in minimizing the role of the government in favor of the private sector. Being the leader of the Chicago School of Economics, founded in the University of Chicago, he had a wide impact on scientific research in all specialties.

Numerous monographs, books, scientific articles, reports, journal columns, television programs, video films and lectures Friedman cover a wide range of topics in microeconomics, macroeconomics, economy history, as well as public policy issues. Edition "Economist" called it "the most influential economist of the second half of the 20th century."

Fredman's methodological innovations were widely recognized by economists, but its policy is recognized as much contradictory. Most economists dismissed it in the 1960s, but since then it has an increasing international influence (especially in the US and the UK), and in the 21st century he was widely recognized among many economists.

The ideas of Milton Friedman were widely used especially in the period 1980s. His opinions on monetary policy, taxation, privatization and deregulation helped politicians and governments around the world, especially the administration of Augusto Pinochet in Chile, Margenet Tatcher in the UK, Ronald Reagan in the United States, Brian Malluni in Canada and after 1989 in many Eastern countries Europe.

Milton Friedmen is the author of the books " Quantitative theory Money "," Reflection on currency history "," Case of Free Trade "," Economic freedom, human freedom, political freedom, "" capitalism and freedom "," social security ".

Books (4)

Capitalism and freedom

The book of the Nobel Prize in the 1976 economy and one of the most famous economists of the post-war era - "Capitalism and Freedom" Milton Friedman - refers to the number of the most significant political economics of the XX century.

The ideas expressed in it restricting the state intervention in the economy and the relationship of economic and political freedom, a flexible exchange rate and a flat scale income tax, denationalization of education and system social security, the creation of a contract army and many others have become a foundation for most of the liberal reforms carried out in recent decades in the most different countries World.

Quantitative money theory

The term "quantitative money theory" is associated rather with a certain overall concept than with a clearly formulated theory.

On freedom

The collection includes fragments of works of two outstanding economists of the 20th century, the laureates of the Nobel Prize in the economy, convincingly showing that political freedom cannot exist without private property and economic freedom.

Article Hayek "Liberalism" is the best a brief presentation History of classical liberalism as doctrines and political movement.

The book is taken from the site http://www.inliberty.ru

Freedom to choose

The book of one of the most influential modern economists of Milton Friedman and his wife Rose Friedman "Freedom to choose" refers to the number of the most famous works of liberal thought of the second half of the XX century. Defending the values \u200b\u200bof individual, economic and political freedom, the authors lead convincing evidence of the ineffectiveness of the bureaucracy and redundancy of its intervention in the life of society on the example state Systems social support, education, financial regulation, licensing of various goods and activities, etc.

The book is taken from the site http://www.inliberty.ru

Nobel's memory premium in economics, 1976

American economist Milton Friedman was born in Brooklyn (New York). When he was still a child, his parents of Sarah Ethel (in Major Loundau) Friedman and Jeno Saul Friedmen, and from Eastern Europe, moved to Rahuway (New Jersey). His mother worked in a haberdashery store, and his father, as F., who later remembered F., "unsuccessfully tried to achieve results in hopeless trading operations." The family had small and non-permanent incomes and could not get out of their needs. Nevertheless, she did not have to starve, and the atmosphere in the family was warm and friendly.

At the age of 16, F. on the competitive selection was adopted at the Rutheger University with the right to obtain a partial scholarship. In 1932, he was awarded a bachelor's degree at once in two disciplines - economics and mathematics. During his studies at the University, F. fell under the influence of two assistants: Arthur F. Burns, who later became the director of the US Federal Reserve, and Homer Jones, the future authority in the area of \u200b\u200binterest rate theory. Johns F. is obliged to writing thesis In economics and receipt of recommendations for continuing specialization in this area at the University of Chicago.

Having received a master's degree in the University of Chicago in 1933, F. has passed for graduate studies in Columbia University (New York). At the end of 1934, he returns to the University of Chicago, becoming an assistant researcher. In the next summer, he took part in a large-scale project of consumer budget research for the National Committee for US Natural Resources, Washington (DC). Cooperation F. with the US National Bureau of US Economic Studies (NBEI) began in 1937, when he began to work as an assistant at Simon Kuznez.

In 1940, they completed writing joint scientific labor "Income from Independent Professional Practices"). This work was subsequently based on the dissertation, for which F. in 1946 was awarded in Columbia University of Doctor's degree in economics. At the same time, one of the conclusions of the said study, namely, that "medicine provides only limited opportunities To increase the income of the doctors of all specialties compared to the income of the dentists, "caused so broad objections to the NBEI that the publication of the book was detained until the end of World War II.

Formation of F. as an economist can be traced from its first independent steps in this science. Its subsequent contribution to the theory and practice of economic science is accompanied by the receipt of unexpected results, it becomes a fruitful researcher and a popular writer-economist, participates in important studiesconducted by government and academic institutions leading the so-called chicago school economists. Despite the fact that many of his views on economic theory and state policy continue to be controversial, he, as English Economist John Barton, "provided us with a foundation for future research on macroeconomics."

During World War II, F. participates in the development of tax policies on the task of the Federal Ministry of Finance and, using the stay in Washington, conducts research at Columbia University for military statistics. In 1945 ... 1946 He teaches the economy in the Minnesota University. Then F. returns to the University of Chicago and becomes a professor an assistant in economics. With the assistance of NBEI F. Begins to work for many years to create a monetary theory.

In 1950, F. as a consultant for the implementation of the Marshall Plan, developed by George, K. Marshall and providing for the restoration of the destroyed war of the economy of Western European countries, arrives in Paris, where it becomes an active defender of the idea of \u200b\u200bfloating exchange rates. He predicts that fixed currency coursesIntroduced by Bretton Woods Agreement, ultimately suffer failure, which happened in the early 70s. His knowledge of the theoretical and practical problems of the economy of European countries increased during cooperation with Professor Fulbright (1953) from the University of Cambridge (England).

Starting working with S. Kuznets, I closely cooperating with economists Dorothy Bradie, Margaret Raid and Rose Director, F. formulated and found a practical confirmation of its hypothesis of "constant consumption income". In his book "Theory of Consumption Function"), published in 1957, F. proved that the concept of John Meinard Keynes, linking the current consumption with the current income, will inevitably lead to an erroneous course. Instead, F. put forward the theory according to which the consumer does not build its consumer calculations, except for temporary, on the current income, relying on the expected or permanent income. Although the permanent income is not always obvious, it could be calculated on a suspended aversion of recent income money. Specified averaging he called "distributed lag."

Exploring an extensive number of practical consumption data, F. found that the results did not disagree with his theory of constant income (in the 50s. Franco Modigliani presented an alternative, but similar to F. Theory of consumption tied to life cycles and explaining the same economic phenomenon). The conclusion about constant income has played important roleBy causing a reasonable change in the formulation of the quantitative theory of money. In subsequent works, F. will show that changes in monetary demand throughout the history of America have always been determined by changes in the field of permanent income.

The value of F. Theory on constant income is difficult to overestimate. Most of the following studies of total consumption confirms this theory, and the developed methodology for determining and evaluating the income predicted in the future everywhere caused the most important interest among macroeconomists. Moreover, the most important achievements in the econometric during the 60s and 70s. Thanks to the statistical methods of F., which he used to assess constant income.

Publication in 1963. Fundamental labor "Formation of a monetary system in the United States" ("A Monetary History of the United States"), written by F. in the Commonwealth with a specialist in the field economic History Anna J. Schwartz, allowed to highlight the importance of the theory of F. not only in the applied sense, but also in the field of money circulation history. The authors collected extensive statistical materials on money circulation, starting from the period of the American revolution and documented the comprehensive impact of participating in state turnover cash on inflation processes.

The head of their joint work devoted to the era of the Great Depression contained the accusation of a federal reserve system in the inability to maintain an adequate level of liquidity. banking system USA. They formulated the following thought in the following chapter: "A radical reduction in the money supply is although the tragic, but genuine testimony of the power of monetary policy as opposed to the opinion of Keynes and his supporters regarding the reduction of the amount of money available as the weakness of the banking system." Continuing to defend its arguments, F. In co-authorship with the economist David Meiselmen published in 1963 an article criticizing the basic idea of \u200b\u200bKeynes and his followers. It has been shown that the nominal consumer spending is determined by the money supply rather than the individual state budget expenditures. These considerations formed the basis of the T. N. Theories of the monetary circulation of the 80s.

According to F., "The whole thing in money", for changes in the growth intensity of nominal income are mainly due to changes in the growth of the money supply. The response criticism of the views of F. and Meiselman on the part of Neokeinsians reflected the main directions of the Debates of the 60s and 70s on the monetary-fiscal policy issues during which, however, had to recognize the basic proposals of F. quite acceptable and legitimate.

F. Monetary Economic Theory gives a clear idea of \u200b\u200bthe economic methods. Economic models, as he believes, should be assessed by their ability to predict real economic results, and not by their speculative constructions. In addition, simple, based on the use of single equations of the model of phenomena occurring in the monetary sphere, much more preferable to the models offered by the supporters of Keynes, which are based on the set of systems of equations. The monetary doctrine F. became the viable basis of existing doctrines, despite the excessive allocation of one causal factor - the money supply, which could not but cause a certain skepticism in a number of researchers.

Achievements of F. one way or another are associated with its analysis of defects of theoretical calculations of Keynes and the effective criticism of the Phillips curve, which approximately interprets t. N. Natural growth of unemployment. The critical analysis of the studied phenomena allowed F. to provide a constant impact on the development theoretical aspects Economic policies and assessment of unemployment factors for increasing periods of inflation and periods of employment of the working-age population. Moreover, its exhaustive analysis of the role of the policy of stabilization of economic situation - and this was especially manifested in its famous analysis of the application of lags in the development of a strategy of economic stabilization - clearly demonstrates how and in connection with which economic stabilization measures may unexpectedly give the opposite effect.

F. was awarded the Nobel Memory Award in 1976. "For achievements in the field of consumption analysis, the history of monetary circulation and the development of monetary theory, as well as for the practical displacement of the complexity of economic stabilization policies." In the Nobel lecture, he returned to the topic, touched back in 1967 when applying to the American Economic Association, - to the denial of Keynes's noticeable remarks between the rate of inflation and unemployment. He came to the conclusion that at a long interval, the Phillips curve still shifts up under the condition of natural growth of unautability.

He showed that under certain conditions, the growth of the phillips curve could indeed become a completely admissible explanation of the cause of economic stagnation in the early 70s. However, the social price of inflation oscillations turns out to be so high that F. becomes a consistent defender of "stability" as opposed to "discretionary" of monetary policy. Steady increase rate of interest monetary operations It could lead not only to the stagnation of fluctuations in the money supply, but also to an increase in the unpredictability of predictions of business activity in the private sector.

F. Deserved Recognition as an adviser to President Richard M. Nixon, despite his discrepancies with him on the establishment of tough price control and wages in 1971. The views of F. The importance of non-interference of the state in social policy was widely known thanks to constant publications. In the column of magazine "News" ("News-week"), as well as thanks to the earlier publication of the book "Capitalism and Freedom" ("Capitalism and Freedom", 1962). Its popular book "Freedom of choice" ("Free to Choose", 1980) even gave the name of the television saver of the cycle of their conversations on social and economic issues.

Many of F., such as reducing the volume of state intervention in the economy, the introduction of hired military service, Using t. n. "Negative income tax" (payments from the budget to persons with insufficient income), received a practical embodiment. Other suggestions - education based on guarantee on subsequent payment, refusal of social security and minimum wages - still meet serious objections from politicians.

Despite the political opponents of the "Conservative" label, F. turns out to be much closer to the classical liberalism of Adam Smith and John Stewart Mill, than to the traditionally conservative wing economic doctrine. He believes that the goals pursued by him in reality do not diverge with the objectives of modern liberal flow. He says: "A different approach to economic PolicyEspecially for the uninitiated, stems mainly due to the difference in forecasts of subsequent economic actions, and not necessarily incorrect the fundamental principles and concepts. " Although the award of F. Nobel Prize caused a number of objections from professional economists and individuals who are interested in issues of the economy, the contribution of the laureate to theoretical and applied research has been widely recognized. So, Paul Semuelson called him a "economic economist."

Returning from the University of Chicago in 1977, F. becomes a senior researcher of the Guteov Institute at Stanford University. For three decades, he is an active member of the American Economic Association, whose president he was in 1967

F. married in 1938; His wife - Rose director, economist; their acquaintance began with joint scientific work In the University of Chicago. They have a son and daughter.

In addition to the Nobel Prize, F. was awarded the Medal of John Beats Clark American Economic Association (1951) and Honorary Scientists of Many American and Foreign Universities and Colleges.

Nobel Prize laureates: Encyclopedia: Per. from English- M.: Progress, 1992.
© The H.W. WILSON COMPANY, 1987.
© Translation into Russian with additions, Progress publisher, 1992.

Milton Friedmen (born 1912) is an American economist. Born in New York. He graduated from the University of Rutgers (USA). In 1933 he received a master's degree, and in 1940 it comes out (together with the S.Kuznets) work "income from independent private practice".

In 1945-1946, M. Frydman teaches the economy in the Minnesota University. From 1948 - in Chicago. In 1950, he participates in the implementation of the Marshall Plan.

In 1971-1974, M. Fryman was an adviser to American president R. Nikson on economic issues.

In 1976 Awarded the Nobel Prize.

The main works of M. Frydman are the books "Theory of consumption function" (1957), "Formation of a monetary system in the United States" (1963), which outlines the main provisions of the theory of monetarism.

If you compare the Keynesian and monetary system, then the first theoretically (as, for example, and Marxism) is more difficult. Cane's theory is more designed from the point of view of categories, patterns, effects, methodology, at one time it sounded like a new word as a revolution. Monetarists are returned to the old values \u200b\u200bof the free market in new historical conditions (from here - counter-revolution, neoconservatism). According to J.Tobin, Friedmen argues on the principle "after that, because of this," the increase in the money supply by 4% will give an increase of 3%, and that Friedman's statement "Money matters" is interpreted as "Money only matter." Friedmen model - single-factor, works on the principle of "entrance - money, output - GNP growth", and there is no causal relationship. According to Tobin, Friedmen, although justified all statistically, but there is no theoretical evidence. Despite this, from the mid-70s. Almost everyone the developed countries Conduct the recommendations of monetarism into life, i.e. An annual percentage of money growth averages 4%. It is impossible to withstand this pace strictly by year, because wars occur (in Iraq, Iran, etc.), natural disasters, presidential elections, the union of Germany, structural, currency and other crises. But Friedman recommends an indicator on average for 5-10 years (if in one year 6%, then 2% should be given in the other, for example, etc.)

Friedman explains the cause of the crisis of 1929-1933. The fact that the money mass then decreased by a quarter of the required amount. Naturally, it is difficult to agree with this "simple" explanation.

However, Friedman has theoretical blocks of its concept, which is more clear than Keynesian approaches, explain the real situation. So, from around 1967. Friedman operates the concept of "natural norm of unemployment", which allows him to explain the phenomenon of simultaneous growth of unemployment and inflation in the 60-70s. We will analyze the essence of the case. In the post-war period, with the help of Keynesian recommendations in Western countries, high (record) employment was achieved. But gradually, and then more and more, the prices began to grow. The problem of finding out the new dependence between inflation and unemployment. The fact is that before the "stagflation" of Keynesians relied on the ideas of the "Phillips curve" (1958), the meaning of which is to establish the reverse relationship between wages and unemployment. According to this curve, 3.5% of unemployment give 6-7% of inflation. It was possible that Keynesians believed, choose such a maneuver when pumping demand through budget deficit, although it will lead to "creeping inflation", but will retain employment at the effective level. But after the recession of 1969-1971. Suddenly, for supporters of Keynes, the pattern ceased to work. Keynesians did not find this reasonable explanation. Friedmen found the reason by introducing the concept of frictional and institutional unemployment in the framework of the "natural norm of unemployment."

Taking the "pure market" of Valras, on which unemployment is voluntary and depends on individual assessments of labor and leisure utility, Friedmen introduced a factor friction and institutional unemployment factor in the model. For a frictional friction, he should change the work due to the change of work, profession, place of residence, etc. Institutional unemployment depends on the availability of the trade union and the state. Trade unions are fighting against dismissal and wage standards (for example, hourly maximum), and the state subsidies and benefits increase their leisure. From here, there are some more percent of unemployment, which, as Fredmen calculated, in the 70s and 7% were about 6%, and in the 80s - 7%. Above this level - unemployment forced, below - idle. Friedmen showed on its schedule, based on the Phillips curve, which the factors described above turn the phillipse curve to the vertical (non-elastic) straight, i.e. Attempts to reduce unemployment below its "natural norm" lead to inflation. So the stagflation was explained, which became generally recognized.

To reduce the unemployment, Friedmen (like other monetarists for other reasons) proposes to provide a business market ("Clean the market"), i.e. Helping job looking for work not by benefits, but information about jobs for jobs, carry out retraining on the necessary professions, reduce all kinds of charity events, state programs. All this is a typical monetarist, conservative approach, whose classic Friedman has become even in life.

M.Fridmen is the author of the theory of permanent income (developed back in 1957 in the work of the "Consumer function theory"). As in other of their writings, and this Friedman follows the rule of proof and verifiable (verifiability). If Keynes believed that the income with income is growing "tendency to savings", Friedmen and other monetarists showed (including empirically based on budget DNICK) that the consumption function depends not only on income, but also from accumulated capital, from "effect rivalry or imitation ", on the relativity of income (that is, its distribution and position of the consumer on the social staircase).

The theory of permanent (permanent, long, continuous) income has become supported in the development of monetarist anticyclic policies.

The theory of monetarism is built on a quantitative theory of money and is characterized by the following provisions:

The main regulator of public life is monetary emission;

The amount of money in circulation is determined autonomously;

The speed of money circulation is hard fixed;

Money emission is stable;

Changing the amount of money has the same and mechanical effect on the prices of all goods;

The possibility of exposure is excluded monetary sphere to the real process of reproduction;

Since changes in the money supply affect the economy late and this may lead to violations, it should be abandoned by short-term monetary policy.

Major postulates of monetarism:

There is an instant reflection of the new information on the curves of supply and demand, that is, the equilibrium prices and production volumes immediately react quickly to change the situation (the emergence of new technology, a change in economic policy);

The number of government regulators is reduced to a minimum (except for tax and budgetary regulation);

The rational nature of the behavior of economic entities;

Providing full information to form expectations from the economy standing by the subjects of economic relations;

The need for perfect competition, operating in all markets;

There is an instant reflection of the new information on the curves of supply and demand, that is, the equilibrium prices and production volumes immediately respond quickly to changing the situation (the emergence of new technology, a change in economic policy).

The positive contribution of monetarism into economic theory is a deep study of the mechanism of the opposite impact of the monetary world on the commodity world, monetary instruments and monetary policy on the development of the economy. Monetarist concepts serve as a basis for monetary policy as a direction of state regulation.

Changing the price level (and nominal income) is the result of changes in the money supply. There is a direct relationship between the growth rate of the amount of money and the growth rate of nominal income through the mechanism of the quantitative theory of money. In other words, the quantitative theory of money establishes a direct connection between the growth of the money supply in circulation and the growth of commodity prices.

Changing the amount of money contradictively affects the rate of interest: the growth of the money supply will first cause a decrease in the rate of interest, and then the increase in costs and inflation increases the demand for loans, which leads to an increase in the percentage value.

In long-term equilibrium, money is neutral, that is, long-term proportionality between money and prices is based on the stability of money demand.

In short and medium periods of time (5-7 years), money is not neutral and can cause real changes in the economy. Due to the short-term impact on issuance, money is important for determining the real level of employment and income.

M. Fryman believed that the budget policy does not matter much (just considering only the revenue part of the budget). Credit and money and monetary policy. But do not work in detail in detail, as it can cause destabilization.

M. Friedman proceeds from the fact that the measured income (y) and the measured consumption (C) consist of permanent and temporary components:

Permanent income (YP) M. Friedman defines as such an income that the consumer hopes to receive for quite a long time. Its value depends on the horizon of the consumption of the individual, the values \u200b\u200bof the accumulated capital, as well as from the place of residence, age, profession, education, race and nationality. In short, this income that the consumer expects to receive during life, based on its age, the formation of the current consumption model.

Temporary or random (transitory) income (yt) "reflects the influence of all" other "factors that a person refers to a random, although they can be a different point of view, predictable the results of such forces, such as cyclical changes in business activity" 3. A temporary income source can be the most different: from an unexpected inheritance before winning the cards. At the same time, M. Friedman emphasizes an element of unforeseen, surprise upon receipt of temporary income: only in this case this type Income will not be able to seriously affect long-term consumer behavior.

One of the central points of the theory of permanent income is the statement that the temporary component of income does not affect consumption. M. Friedmen believes that all the time income received is saved, and the level of long-term consumption is determined by permanent income.

Since consumption is based on the extent expected to the long-term perspective, it also affects such factors as the level of long-term interest rate, the value of the accumulated capital, the tastes of the consumer.

In general, M. Fridmen believes that people are neutral to the future, that is, the tendency to consumption from year to year remains unchanged. If the consumer seeks to maintain consumption at a certain unchanged level, then consumption becomes a function not only from permanent income, but also from interest rate:

And the permanent income of M. Friedman determines equal terms of capital (both human and other) at a percentage rate:

M. Fridmen believes that the motives for creating savings exist not only in a state of uncertainty. So, in the presence of a complete definiteness of savings, two functions perform: first, they align the flow of income, making consumption more uniform; Secondly, profit in the form of interest income.

In the economic uncertainty of savings create a reserve. M. Fridmen believes that investing in "tangible assets" that is, in physical capital, more reliably than in the capital of human due to the remoteness in the time of receipt of income2.

So, in general, the permanent income model is written as follows:

Cp \u003d k (i, w, u) yp.

An important conclusion of monetarism is the provision that the value of the GNP, reflecting the level of economic activity in the economy, in the end, follow some temporary lag over the dynamics of the amount of money supply.

This statement is consistent with the methodology of quantitative theo-riology of money (CTD), which proves the presence of a causal connection "Money" or "Money - Income". Within the framework of the CTD, there were several approaches to show how this bunch "works", through which mechanisms the impact of the level of money supply to the level of prices and income occurs. The most famous and close to the ideas of monetarism was the transaction version of Irwin Fisher, who served as the starting point for the development of M. Friedmen of its version of CTD - the theory of nominal income.

I. Fisher explained the presence of this connection using its exchange equation:

Where: m - money mass;

V - the rate of circulation;

P - price level;

Q is the number of goods.

Therefore, M. Friedman puts the task - to investigate the nature of demand for money and factors, which determine it, as it is the demand for money from consumers and manufacturers that determines the volume of real money supply in circulation and the speed of its turnover.

Based on this, as part of its analysis, M. Friedmen explores the nature of the rate of circulation of money supply and is responsible for the question of what the mechanism of the impact of the money supply to the price level and nominal income. The methodological basis for its analysis becomes the theory of permanent income and the conclusions made on its basis. In the development of his version of CTD, M. Fridmen passed a peculiar evolution from the analysis of demand for money (in which it is based on the methodology and conclusions of I. Fisher) in his early works "Quantitative theory of money: a new rethinking" (1956), "Demand for money: Some theoretical and empirical results "(1959) to the completed model of the theory of nominal income, in which he demonstrated the work of the" transfer mechanism ", in the works" Theoretical Frames for Monetarist Analysis "(1968) and" Monetarist theory of nominal income "(1971).

Friedman offers the following option of the theory of nominal income:

The first equation (1) is a function of demand for money, presented in the form of a product of the price level of the total expected profitability from a set of different assets.

The second equation (2) is the MS money supply, which is a function from a set of interest rates R, the level of the total nominal income y (GNP in current prices). The level of economic uncertainty, a change in a political nature, is indicated by the level of economic uncertainty, that is, something is difficult to formalize.

Equation (3) is an equilibrium condition in the money market (equality of demand and money supply).

Equation (4) is the percentage rate equation. This equation is the synthesis of ideas I. Fisher about the nominal and real interest rate and J.M. Keynes that current market interest rate in more than Determined by the level of interest rate expected long period. R is a market interest rate, K0 - the difference between the expected real interest rate and the expected (permanent) growth rate of real income; * - "Permanent" or expected growth rate of nominal income y.

In the Friden model, the main factor that violates the balance in the money market is an unpredictable increase in the supply of money supply. As a result, economic agents revise the structure of their assets portfolios. They increase the demand for some assets and reduce it to others, which in turn leads to an increase in prices for some assets and a decrease in others and, therefore, to a decrease in the profitability of the first, that is, a decrease in the interest rate.

It stimulates demand for loan capital, and as a result, the interest rate begins to grow. However, after time, it returns to an equilibrium level. M. Frydman takes a secondary role to influence interest rates.

The main effect of shifts is manifested, first of all, in terms of price, provided that the production maximizes the resources available in the economy.

Thus, the transfer of pulses from the money supply to the level of nominal income occurs through mediating changes in price levels. Consumers are adjusted to the changed level of money supply and circulation and prices by changing their "cash balance"