Hidden Figures: A New History of the Permanent Income Hypothesis

Abstract

This article uses archival sources to reconstruct an alternate history of Milton Friedman's A Theory of the Consumption Function, spotlighting the contributions of his collaborators Margaret Reid, Dorothy Brady, and Rose Friedman. Although Milton Friedman offered public credit to his wife and their two close friends, none received formal recognition or reward for their contribution to the permanent income hypothesis. The article documents this hypothesis as an example in professional economics of the well-known “Matilda effect,” in which women's intellectual contributions are systemically devalued, while arguing it is important to distinguish between formal and informal credit. Further, the article connects the lower status of women's consumption economics to broader shifts in the economics discipline across the twentieth century.