The economic revolution

Milton Friedman was the founder of monetarism that promotes the quantity theory of money. This theory describes the link between inflation and money supply and involves the rejection of government intervention, who only has to provide public goods when the market is not able to offer them.

Furthermore, M.F. was a supporter of the ‘laissez-faire’ idea, which emphasizes the advantages of the marketplace.

However, his biggest realization was his Permanent Income Hypothesis (spending a proportional amount of your permanent income), which contrasts sharply with the generally received consumption analysis (link between consumption and current income).

Thanks to all these accomplishments, M.F. received the Nobel Memorial Prize in Economic Sciences in 1976.

Source: http://en.wikipedia.org/wiki/Milton_Friedman#Nobel_memorial_prize_and_retirement

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