(L7) Sandmo Chapter 18

Question 1

Postwar Economic Theories

Answer 1

The evolution of economic thought post-Keynes, with a focus on critiques and extensions such as Milton Friedman’s challenge and Robert Solow’s extensions.

Question 2

Milton Friedman’s Contributions

Answer 2

Friedman critiqued Keynesian policies for lack of rigor and inability to address stagflation, proposing the permanent income hypothesis against short-term fiscal policies.

Question 3

Friedman’s Influence and Philosophy

Answer 3

He emphasized economic freedom’s role in society and supported empirical research-based policy recommendations, advocating for free markets and limited government in his works.