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- Title
An Essay on the Foundations of Friedman's Methodology.
- Authors
Frazer Jr., William J.; Boland, Lawrence A.
- Abstract
The article focuses on the foundations of the methodology of Milton Friedman, an economist. Milton Friedman's famous essay on methodology has been presented as an instrumentalist argument for instrumentalism. Friedman's early orientation in methods had no immediate background in established economics. That the main and crucial elements of Friedman's work came from outside may be gleaned from a review of these elements and their antecedents. In Friedman's theory, the time frames concerning transitory and permanent magnitudes are brought into his use of the liquidity preference construction. Equilibrium is a permanent magnitude of one where the velocity is constant, with denominator, numerator, and real output moving at the same rate. This comes up with the use of logarithms and the discussion of adjustment processes in response to a shift in monetary growth from one fixed rate of effects, an intermediate income effect, and a long-run inflationary expectations effect. Where expectations operate with a short lag, the expectations effect takes place almost immediately and the traditional short-run effects mostly get submerged.
- Subjects
ECONOMICS methodology; FRIEDMAN, Milton, 1912-2006; ECONOMICS; MATHEMATICAL economics; LIQUIDITY (Economics); EQUILIBRIUM; PRICE inflation; FINANCE
- Publication
American Economic Review, 1983, Vol 73, Issue 1, p129
- ISSN
0002-8282
- Publication type
Article