Milton Friedman, one of the most influential economists of the past century and winner of a 1976 Nobel Prize, died yesterday morning of heart failure at a San Francisco hospital, a spokeswoman for his family said. He was 94.
A free-market economist, Friedman preached free enterprise in the face of government regulation and advocated a monetary policy that called for steady growth in money supplies.
His ideas played a pivotal role in informing the governing philosophies of world leaders such as former British prime minister Margaret Thatcher and former US president Ronald Reagan.
His theory of monetarism, which was also adopted in part by the Nixon, Ford and Reagan administrations, opposed the traditional Keynesian economics that had dominated US policy since the New Deal.
Friedman believed that economic stabilisation policy did not operate like a thermostat, because of the "long and variable lag" between policy actions and their ultimate effects.
St Louis Federal Reserve Bank president William Poole, another noted monetarist, said much of modern central bank thinking stemmed from Friedman's work. Mr Poole said Friedman's most important contribution was to bring theoretical economic thinking to bear on a range of public policy issues.
"Before Milton, economists were not taken seriously by public policy-makers," Mr Poole said, citing the influence of Friedman's work on the issues of US military conscription, school vouchers and tax policy, as well as his better-known contribution on the importance of money supply to inflation.
"He was an extraordinarily important figure in the profession," Mr Poole said.
In an obituary in the Financial Times, Samuel Brittan said: "Milton Friedman was the last of the great economists to combine the possession of a household name with the highest professional credentials. In this respect he was often compared to John Maynard Keynes, whose work he always respected, even though he to some extent supplanted it.
"Moreover, in contrast to many leading economists, Friedman maintained a continuity between his Nobel Prize-winning academic contributions and his journalism."
Friedman called for a steady and predictable monetary policy as the surest guarantee against excessive fluctuations in the general price level and in the level of economic activity.
In 1976, his years of teaching and nearly two dozen books championing individual freedom in economics and politics were recognised with the Nobel Prize for economic science.
Friedman, however, was not without controversy.
His Nobel ceremony in Stockholm prompted a large turnout of demonstrators who criticised him for the economic advice he provided to the government of Augusto Pinochet.
Later, as a columnist and contributing editor for Newsweek magazine and through frequent television appearances, Friedman became one of the country's most visible economists.
In a 2004 retrospective on his work, he traced his roots and those of the so-called Chicago school of economics back to Adam Smith.
