Introduction

In the previous chapter we examined reactions to Friedman's analysis of monetary lags. In this chapter we examine three reviews of Friedman and Schwartz's Monetary History, the first monograph product of their collaboration. Publication of the Monetary History in 1963 marked an important and long awaited point in their research project. In the Monetary History, there is a much richer catalog of evidence on money's role in the economy than there is in Friedman's analysis of the lags. The three reviewers are James Tobin and John Culbertson, whose post hoc ergo propter hoc criticisms of Friedman's monetary analysis are covered in Chapters 5 and 7, and Robert Clower, whose review is notable for its methodological diagnosis of the conflict between Friedman and his critics.

Tobin's review

James Tobin presented a version of his June 1965 AER review at the American Bankers Association Conference of University Professors at Princeton in September 1964. Friedman's written response for the conference remained unpublished.

Tobin's review was on the whole favorable, especially toward the book as a history of monetary policy. His primary concern was with the theoretical framework underlying and guiding the analysis and the associated assignment of causal roles. He was particularly concerned with their dismissal of interest rates as a factor in money demand and with what he considered an inclination to draw stronger conclusions about the power of monetary policy than the evidence warranted.