Milton Friedman, one of the most influential economists of the past century and winner of a 1976 Nobel Prize, died today of heart failure at a San Francisco area 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 like former British Prime Minister Margaret Thatcher and former US President Ronald Reagan.
They also strongly influenced what became known in New Zealand as "Rogernomics" - named after former finance minister Roger Douglas of the Labour Government in the second half of the 1980s.
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. 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," 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," Poole said.
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 Friedman's years of teaching and nearly two-dozen books 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 Friedman for the economic advice he provided to the government of Augusto Pinochet, who oversaw Chile's 17-year dictatorship in which some 3,000 leftists were killed.
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 retrospective on his work, Friedman traced his roots and those of the so-called Chicago school of economics back to Adam Smith.
He moved the base of his operations to California in 1977, when he became a senior research fellow at Stanford University's Hoover Institution.