1 Preliminary Draft Please Do Not Quote Reflections on Milton Friedman’s Contributions to Open Economy Money/Macro

This paper represents preliminary research on Milton Friedman’s work on the open economy. This investigation constitutes a portion of a wider agenda, which is to provide an historical overview of the development of the open economy macromodel during the post-World War II period. This paper is to be presented at a conference at Fordham University, Lincoln Center Campus, on October 3, 2008, entitled “Money and Monetary Policy.” The author would like to thank Jerry Dwyer and Jim Lothian for proposing this research topic and providing brief guidance as to how to proceed. David Laidler suggested looking at Friedman’s work on bimetallism. Warren Young sent scans of correspondence between Friedman and Sohmen concerning the “elasticity pessimism ” controversy, and Rob Leeson sent a copy of volume two of his intellectual biography of Friedman, entitled “The Decline and Fall of Bretton Woods. ” The University has given the author a twelve-month sabbatical to carry out work on the open economy macromodel. The views expressed in this preliminary version are entirely the responsibility of the author.