Friedman’s answer to economic crises

Only in the seventies people paid really attention to Milton Friedman’s ideas. This was because the world saw for the first time stagflation in the seventies. This is the combination of recession and inflation. Stagflation couldn’t be explained by the theories of Keynes that were dominant from the great depression in the thirties till the seventies. Friedman especially paid attention to, and explained economic crises by, money supply. In 1976 he won the Nobel prize for economics for his monetary theories. The core of all his theories is that controlling money supply is a major key to economic health.

Source: http://www.washingtonpost.com/wp-dyn/content/article/2006/11/16/AR2006111600592.html

Frederik Verplancke