Research On Friedman's Monetary And Inflation Theories

On the stage of economics in the 20^th century, the theories of two schools influence the world greatly. And because of their characters and contending with each other, they impress the economists and scholars in academe. One is Keynesism who claim the government should regulate the macroeconomy to achieve equilibrium, because the capitalism can't make it by itself. The government needs to use various policies and instruments to achieve the goals, especially financial policy. The other one is Monetarism who oppose Keynesism, and on the faith of stability of personal economy, they are against state interventionism, and they stick to Liberalism. government and market.As the founder of Monetarism, Milton Friedman's contributions to Monetarism is apparent. He was dead in Los Angeles on November 16th, 2006. Whether his proponents or his opponents deliver their memories, which companied with it are numerical disputes and doubts. So this paper is not only a memory for his contribution, but also a research about his theories, and an appraisement to them, by which clarifies some misunderstanding.Friedman's economic theories refer to lots of fields, what he researched deepest are his Monetarism, Consumption Function and Inflation theories. And this paper will put emphases on his research on Monetarism and Inflation theory. Not only because they have closest relationships with each other, so that we can take Inflation theory to be a part of his Monetary theory, but also there are too much for us learning from them, and it will help us recognize the regulation of economy.Friedman has made great contributions to Monetarism, even we can say the rise of Monetarism should be attributed to him completely, and my research contains all aspects in this field, such as pure Monetary theory, theory about Monetary Policy, and even Flexible Exchange theory. I will take Inflation theory to be a part of his Monetary theory, because I think the Inflation theory is a natural extension of his Monetary theory, and he said: inflation is always a phenomenon of money, no matter where and when. So they can be researched under a mutual framework. And another important reason for this is that until now from Reform, money and inflation are always together, and this have puzzled academia and governors who make monetary policies. So there is a great realistic sense.Friedman spread his thoughts of market economy to Chinese when he visited China for three time in 1980s and 1990s. And his visits are helpful for cultivation of economics, as well as economic education. Today, we are reforming our market economy system and we are on the road Friedman's theories have implied. So we can learn so much from Friedman for our economy reformation.