Nobel Prize-winning Economist Milton Friedman Dies at 94

Milton Friedman, the legendary but controversial American economist who inspired Margaret Thatcher's monetarist revolution, has died at the age of 94.

Professor Friedman, who won the Nobel prize in 1976, inspired the overturn of Keynesian economics in much of the west during the 1970s and 1980s as world leaders, including Ronald Reagan, focused on the need to bring down double-digit rates of inflation.

He died of heart failure in a hospital close to San Francisco, a spokesman said.

The economist had argued against Keynesian tax-and-spend policies during their heyday in the 1950s and 1960s but became far more influential when the oil shocks of the 1970s led to a combination of high unemployment and high inflation, known as stagflation. His argument that governments should control inflation rather than seek to boost growth still underpins modern economic orthodoxy.

A spokeswoman for Lady Thatcher declined to comment, but the Bank of England's governor, Mervyn King, said: "Milton Friedman was a towering figure in 20th century economics, who influenced both theory and policy."

John Blundell, head of the free-market thinktank The Institute of Economic Affairs, said: "It was Milton who taught us that inflation is not caused by the weather or trade unions or anything like that. It is always and everywhere a disease of money."

The British monetarist Tim Congdon said he was key in the monetarist counter-revolution, with huge influence.

Prof Friedman's seminal work was A Monetary History of the United States, co-authored with Anna Schwartz in 1963.