Milton Friedman, perhaps the best-known academic economist of modern times, died yesterday at the age of 94. He lived an amazing life, winning the Nobel Prize in 1976 and the John Bates Clark Award (essentially the MVP award for being the best economist under the age of 40) in 1951, and working in the field until the day he died.

Friedman was best known in the field for shifting macroeconomists' viewpoints back toward the importance of monetary policy. He also reemphasized the importance of the Federal Reserve's role in the business cycle, through its alteration of interest rates and its effects on inflation.

After nearly half a century in which macroeconomists focused almost entirely on the role of fiscal policy as a source of economic stabilization, Friedman developed a new theory called monetarism, which stressed that the actions of central banks are just as crucial a component of controlling the business cycle. Friedman's ideas came as quite a shock to most economists at the time. Many of them had instead been focusing on refining John Maynard Keynes' Depression-era theories on macroeconomic policy and the role that fiscal policy played in the business cycle.

Ever the skeptic regarding government's ability to help stabilize the economy, Friedman employed empirical research to assert that bad monetary policy could historically be at least as responsible for recessions as bad fiscal policies were. In his seminal book, A Monetary History of the United States, 1867-1960, Friedman persuasively argued that the Great Depression was caused more by bad monetary policy at the Federal Reserve than any other shock to the economy.

As with most economic theories, most of Friedman's thoughts haven't necessarily meshed with the facts over time. But his contributions to the field remain important for the renewed focus they placed on monetary policy, and for the burst of new ideas that developed as extensions of or in opposition to his own postulations. Perhaps once a century, such an economist comes along, causing so great a shift in thought and advancement of debate in the field. For this, Milton Friedman will always be remembered.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.