Every academic discipline has dirty secrets. Those of economics include the fact that some of our best known principles are based on very thin data. The Phillips curve, which is relevant to much of ...
About a half-century ago, my investment and economic mentor, Bradford F. Story, remarked that leaders at the Federal Reserve and Treasury would never succeed until they disabused themselves of the ...
Federal Reserve Board watchers and economic commentators continue to emphasize reliance on the Phillips Curve, the theory that asserts that higher inflation leads to lower unemployment, and that ...
The Phillips curve predicts that when the unemployment rate drops, inflation will rise as businesses compete for scarce labor and drive up wages. The late William Phillips, a neo-Keynesian economist ...
The Phillips curve suggests rising wages from low unemployment may increase inflation temporarily. High inflation may prompt Fed rate hikes, raising borrowing costs and wage demands. Despite ...
Economics is not a museum of immortal models. It is a diagnostic discipline whose tools must match the condition of the economy under examination.
Price rigidity is a key mechanism through which monetary policy is thought to affect the economy. When some prices are hard to change, firms may respond to a monetary impetus by changing instead their ...
Did they claim that it showed a permanent tradeoff between inflation and unemployment. James Forder says no. Is the intellectual history and self image of modern macro based entirely on the critique ...
Repeat after me, class: Growth does NOT cause inflation. Write it on the blackboard 100 times. For decades, the economics profession has been trying to tell us all just the opposite. They keep ...
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