The impact of Milton Friedman on modern monetary economics: Setting the record straight on Paul Krugmanʹs “Who was Milton Friedman?”

Paul Krugmanʹs essay “Who Was Milton Friedman?” seriously mischaracterizes Friedmanʹs economics and his legacy. In this paper, we provide a rejoinder to Krugman on these issues. In the course of setting the record straight, we provide a self-contained guide to Milton Friedmanʹs impact on modern monetary economics and on todayʹs central banks. We also refute the conclusions that Krugman draws about monetary policy from the experiences of the United States in the 1930s and of Japan in the 1990s.