Abstract A major contribution of Friedman’s 1968 presidential address was the long run vertical Phillips curve. This view has become so profoundly entrenched in macroeconomists’ way of thinking that evidence-based increasing acknowledgment of ‘hysteresis’, has not really discarded it. Although the notion of the NAIRU now prevails on that of the ‘natural’ unemployment rate, its macroeconomic features are the same as Friedman’s natural rate. Yet the path-dependence of empirically estimated NAIRUs causes an anomalous dissociation between theory and empirics. This should call for an alternative theoretical framework that might rehabilitate the original approach taken by Phillips vis à vis Friedman’s legacy.
Stirati, A., PATERNESI MELONI, W. (2018). A short story of the Phillips curve: from Phillips to Friedman...and back?. REVIEW OF KEYNESIAN ECONOMICS, 6(4), 493-516 [10.4337/roke.2018.04.08].
A short story of the Phillips curve: from Phillips to Friedman...and back?
Antonella Stirati;Walter Paternesi Meloni
2018-01-01
Abstract
Abstract A major contribution of Friedman’s 1968 presidential address was the long run vertical Phillips curve. This view has become so profoundly entrenched in macroeconomists’ way of thinking that evidence-based increasing acknowledgment of ‘hysteresis’, has not really discarded it. Although the notion of the NAIRU now prevails on that of the ‘natural’ unemployment rate, its macroeconomic features are the same as Friedman’s natural rate. Yet the path-dependence of empirically estimated NAIRUs causes an anomalous dissociation between theory and empirics. This should call for an alternative theoretical framework that might rehabilitate the original approach taken by Phillips vis à vis Friedman’s legacy.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
