President George W. Bush said Nov. 17 that the U. S. had "lost one of its greatest citizens."
"Milton Friedman was a revolutionary thinker and extraordinary economist whose work helped advance human dignity and human freedom," he said in a statement.
Friedman died of heart failure Nov. 16 at the age of 94 in San Francisco, California, near Stanford University where he taught most recently, friends and associates said.
Friedman won the Nobel prize for economics in 1976 and his thinking greatly influenced former president Ronald Reagan and ex-British Prime Minister Margaret Thatcher.
Secretary of State Condoleezza Rice, who was a provost at Stanford University, mourned the loss of "very close personal friend."
"He was irrepressible. He was one of the smartest human beings I have ever known, but he was funny and warm and a great support to me when I was provost at Stanford," Rice said.
Friedman's views were shaped by the Great Depression. In his writings, he blamed the Federal Reserve for choking off the money supply and so turning what could have been a passing recession into a "major catastrophe" for the world. That view has held sway with successive Fed chairmen since, including incumbent chief Ben Bernanke, who said he would be "sorely missed".
"The direct and indirect influences of his thinking on contemporary monetary economics would be difficult to overstate," Bernanke said. Friedman "conveyed to millions an understanding of the economic benefits of free, competitive markets, as well as the close connection that economic freedoms bear to other types of liberty", he added.
Friedman's "monetarist" theories emphasized that government should get out of the way, and strive only to control the supply of money and so keep a lid on inflation, which he saw as the greatest economic danger.
From 1946 to 1976 Friedman taught economics at the University of Chicago, pioneering the "Chicago School" of free-market thinking, and remained a professor emeritus there. The economist, who coined the phrase "There's no such thing as a free lunch", was also a senior advisor at the Cato Institute, a libertarian think-tank in Washington.
"In my view he was the greatest champion of human liberty in my lifetime, certainly in the 20th century. And he didn't slack off in the 21st century," Cato president Edward Crane said.
Friedman's work was often contrasted with British economist John Maynard Keynes, whose belief in the necessity for governments to intervene in times of economic strife long dominated policy thinking. Rejecting the Keynesian model, both Thatcher and Reagan used the Friedman school to help inform their vision of small government, deregulation and privatization.
Friedman was born on July 31, 1912 in New York, the youngest of four children to Jewish immigrants from what is now Ukraine. In the 1930s, he worked odd jobs to pay his way through Rutgers University, before attending the University of Chicago and winning a doctorate in 1946 from Columbia University. A prolific writer, his books included "Capitalism and Freedom" and, co-written with his wife Rose, "Free to Choose" and "Tyranny of the Status Quo", which both accompanied television series. The couple established the Milton and Rose D. Friedman Foundation, to promote parents' right to choose the schools their children attend, in Indiana.
Copyright Agence France-Presse, 2006.