inflation equals alcoholism in both cases when you start to drink or when you start printing too much money the good effects come first and the bad effects arrive later so in both cases there is a strong temptation to overdo it drink too much e print too much money when it arrives the cure is the opposite when you stop drinking or when you stop of printing money the bad effects they come first and the good effects they come later that's why it's so difficult

persist with cure many times we have read or heard of milton friedman both in articles cheap videos or books of macroeconomics which makes us ask us who is milton friedman Well, today in I company we will talk of his life and his contributions to economy so without further ado we start [Music] milton friedman american born in New York on July 31, 1912 was a

economist and intellectual statistician of Jewish origin awarded the prize economics Nobel in 1976 is the most characteristic economist of the so-called chicago advocate school free market is considered one of the great disciples of adam smith after educating at universities from chicago and columbia started exercising as a professor at the university of chicago in 1948 is the most important economist of the so-called monetarists

with john maynard keynes and von hayek fridman is considered one of the most influential economists of the 20th century and passed away in November 2006 milton friedman has a lot of works dedicated to the study of economy among them the most important are price theory a program of monetary stability and banking reform capitalism and currency freedom and developing training and career freedman

He combines his teaching activity with different positions in the administration of the us was an advisor to the government of richard nixon ronald reagan george w.bush in the us and also for margaret thatcher in the uk- their contributions to the economy enjoyed the maximum recognition possible when in 1976 was awarded the Nobel Prize of economy mainly due to his studies in the areas of analysis consumption its contributions in theory

monetary and the complexities of policies aimed at stabilizing the demand unlike kane is that said that the consumption of a period depended exclusively on the income of the same period Freedman postulated that it depended on the permanent income that is to say income in the long term this new approach had an emphasis on expectations and consumer projections also corrected the phillips curve introducing the role of expectations in this model his financial theory

inspired the that I take the us federal reserve as response to the financial crisis of the year 2008 economic thinking of frischmann fridman stands out for being the most emblematic representative of monetarists is a fervent defender of the idea that there is a clear relationship between the amount of money in circulation and inflation levels regarding monetary policy Fridman claims that the authorities must solely responsible for supervising

effectively how much base money programming the corresponding rate of annual growth of money according to fridman is the only way to have bass control possible tensions inflationists one of the great macroeconomic objectives is control inflation well Freedman believes that the total freedom of market will achieve equilibrium economic and consequently will be avoided inflationary tensions too argues that there are automatic mechanisms

adjustment in the economy in other words eastman is totally contrary to the state intervention in the economy proposed by queines fridman is a clear supporter of liberalism economic so the free competition is a key aspect in their thesis without state intervention in the precisely fridman economic systems he was very critical of keynes's ideas especially in those that referred to the intervention of the sector public in the economy

freedman was contrary to the state acts on aggregate demand to try to achieve stability economic the famous helicopter that throws money freedman in chapter 2 of the book of mystery of money or paradox of money to present his ideas, he has a metaphor known as the helicopter of fridman which is next in a fictional community located on an island different activities are developed economic like agricultural production

industrial trade services etcetera is an independent community which means you have no contact with the outside so much there is no exchange or trade exterior as well as movements migratory also its inhabitants have a very similar wealth and income one day a helicopter appears and starts throw money bills on the community in such a way that they fall from uniformly in each household obtaining the same amount of money fritz the more you

ask what is the result of that really rain their money citizens would be richer would be improved the standard of living in the community the answer that he manifests is the next it's easy to see what the end result the attempts of the people spending more than they get get frustrated but in the process of these attempts will increase the value nominal of goods and services extra pieces of paper that is tickets do not alter the conditions

community basic do not offer additional productive capacity available the money fallen from the sky no would generate more raw materials more goods and services plus infrastructure productive capacity would be exactly the same as the day before the arrival of the helicopter the only result would be the increase in prices plus banknotes in circulation in the community is inflation in actually the helicopter is nothing but the metaphor that I use fridman to use the policy they practice

some central banks to try to tackling the problems of economies when they decide to print more money without that the value of this is sustained by wealth creation in the economy in theory the intention of the central banks opting for this guy of performances is to inject more money into the economy and facilitate the consumption of agents companies and families but as fridman already explained and have warned many economists since then the remedy can be worse than disease

and is that this increase in demand shoot prices generating hyperinflation and in the end the family continue with the same or even less spending capacity that at first freedman proposes solving problems inflation limit the growth of the money supply to a constant and moderate rate milton friedman is still considered by his detractors as one of the best 20th century economists Well friends this is the video of the contributions from milton friedman

winner of the nobel prize for economics in 1976 any comment you can do it here in the video if you want to see more than these topics you can recommend and subscribe to the channel remember about the is pilot whale and this is me company [Music]