Milton Friedman

             Milton Friedman was an economist in the 20th century who died at the age of 94 in 2006. He was born to a jewish family in New York and earned his BA from Rutgers University, his MA from University of Chicago and then his PhD from Columbia University. In 1951, Friedman received the John Bates Clark Medal honoring economists under age forty for outstanding achievement. In 1976 he was awarded the Nobel Prize in economics for “his achievements in the field of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.” Before his awards, Friedman was an advisor to president Richard Nixon was president of the American Economic Association in 1967.

              Friedman was best known for reviving interest in the money supply as a determinent of the nominal value of output, which is the quantity theory of money. He co-authored, with Anna Schwartz, A Monetary History of the United States (1963), which was an examination of the role of the money supply and economic activity in U.S. history. A  conclusion of their research was one that had to do with the role of money supply fluctuations as contributing to economic fluctuations.  Friedman's  research and some theory supported the conclusion that the short-run effect of a change of the money supply was primarily on output but that the longer-run effect was primarily on the price level. Friedman was the main proponent of the monetarist school of economics. He maintained that there is a close and stable association between price inflation and the money supply, mainly that price inflation should be regulated with monetary deflation and price deflation with monetary inflation. He famously quipped that price deflation can be fought by "dropping money out of a helicopter." These are some of Milton Friedman's theories and beliefsm which lead him to be such an influencial economist.

Unemployment During the Recession

         Unemployment occurs when people are without jobs and have actively looked for work within the past four weeks. The unemployment rate is measured by dividing the number of people unemployed, over all individuals currently in the labour force. During a recession, the country's liquidity is not at its best. When this occurs, companies do either of the two things: 1) reduce unneccesary expenditure, or 2) reduce unneccesary workforce. This leads to unemployment because the company is in no position to expand, therefore the number of fresh employment positions wouldn't increase.
           The effects of unemployment are pretty serious and not only economic, but social too, especially for men. Studies have shown that men who are unemployed feel more depressed and have a lower self esteem. They are less likely to leave less satisfactory jobs This has to do with the stress of them not being able to support their families. Frequently, crime rates rise as people are unable to meet their needs through work. Divorce rates often rise because people cannot solve their financial problems.  The rate of homelessness rises, as do the rates for mental and physical illness.  Homes are abandoned and neighbourhoods are demolished. The ability of government to provide for people is also seriously compromised.  When there is high unemployment and a recession, people pay less in income taxes and also pay less in sales taxes because they purchase fewer goods and services. It's unfortunate, because even the people who remain employed, are affected by recessions aswell.

Unemployment Rate in Canada