There are two books that dominate the economic landscape in the 20th century. The first is Keynes’s A General Theory of Employment, Interest, and Money. The second is Milton Friedman and Anna Schwartz’s A Monetary History of the United States, 1867-1960. The latter changed forever the way the profession and ultimately the general public looked at money, the Federal Reserve and inflation. It had an enormous impact on business cycle theory and theories of macroeconomic stability. I think it also changed the way central bankers looked at their job and how they behaved.
I recently spoke with Milton Friedman about the ideas in two of his books, A Monetary History and Capitalism and Freedom.
This EconTalk podcast is the first part of that conversation. It focuses on monetary issues—primarily the role of the Fed, the idea that inflation is everywhere and always a monetary phenomenon and why central bankers such as Greenspan and Bernanke appear to be wiser than they actually are. Friedman also speculated briefly on the likely pattern of inflation in the future.
The second part of the conversation on the issues in Capitalism and Freedom will be available next week. Feel free to subscribe to EconTalk at the iTunes Music Store or wherever fine podcasts are sold (or in this case, released without charge.)