Milton Friedman: 3 ideas worth knowing

3 ideas from Milton Friedman, each explained in a minute and credited to the original work. Free on Savvy.

A one-off bonus barely changes your spending — Milton Friedman explained why
Friedman argued people don't set spending by this month's paycheck, but by their estimate of long-run, 'permanent' income averaged over a lifetime. A temporary windfall like a tax …
— Milton Friedman, A Theory of the Consumption Function
An island's currency was often too big to move, so ownership just changed by word of mouth
On the Micronesian island of Yap, giant carved limestone discs called rai served as high-value money, some over 3 metres across, quarried on a distant island and paddled home by ca…
— Milton Friedman, Money Mischief: Episodes in Monetary History
An economist imagined dropping cash from a helicopter to explain inflation
In a 1969 essay, Milton Friedman used a thought experiment, a helicopter dropping $1,000 in cash on a community, to explain how a pure increase in the money supply, with nothing el…
— Milton Friedman, The Optimum Quantity of Money

Five ideas worth knowing, every week