Neil Monnery, 30 June 2017

Post-war Hong Kong delivered one of the most dramatic improvements in living standards in history, a transformation regarded by Milton Friedman as an experiment in the potential impact of economic freedom on economic growth. This column assesses the contribution of one key official – finance minister Sir John Cowperthwaite – whose laissez-faire approach of ‘positive non-interventionism’, much admired by Friedman, underpinned that success. It also explores, 20 years on from the handover to China, whether a second stage of the Hong Kong economic experiment might be in progress, perhaps leading to faltering freedom and faltering growth.

Neil Ericsson, David Hendry, Stedman Hood, 04 May 2017

When empirically modelling the US demand for money, Milton Friedman more than doubled the observed initial stock of money to account for a “changing degree of financial sophistication” in the US relative to the UK. This column discusses effects of this adjustment on Friedman’s empirical models. His data adjustment dramatically reduced apparent movements in the velocity of circulation of money, and it adversely affected the constancy and fit of his estimated money demand models. 

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