Friedman was also known for his work on the consumption function, the Permanent Income Hypothesis (1957), which Friedman referred to as his best scientific work [REF].
In 1982 Kydland and Prescott also founded the theory of Dynamic Stochastic General Equilibrium (DSGE), large systems of microeconomic equations combined into models of the general economy, which became central to the New Neoclassical Synthesis, incorporating theoretical elements such as sticky prices from New Keynesian Macroeconomics.