Ec 970

Phillips Curve:
Inflation and Unemployment

Milton Friedman
1976

"for his achievements in the

fields of consumption analysis,
monetary history and theory and
for his demonstration of the
complexity of stabilization policy"

Edmund Phelps
2006

"for his analysis of

intertemporal tradeoffs in
macroeconomic policy"

Edmund Phelps

Golden Rule savings rate

microfoundations
adaptive expectations

natural rate of unemployment

New Keynesian Economics

=
rational expectations
+
sticky prices and wages

statistical discrimination
economic justice
economic inclusion

Milton Friedman

academic (Chicago School)

public intellectual
pragmatic libertarian

Keynes, Samuelson, Friedman

permanent income hypothesis

short-run Phillips Curve
natural rate of unemployment

fiscal and monetary policy lags

Monetary History
of the United States
(with Anna Schwartz)
monetarism

quantity theory of money

Inflation is always
and everywhere
a monetary
phenomenon.

Methodology
of Positive Economics
judge theories by the accuracy of
their prediction, rather than by
the realism of their assumptions

no political freedom without

economic freedom
but the converse
not necessarily true
Hong Kong

all-volunteer military
school choice (vouchers)
The Friedman Foundation for
Educational Choice
legalization of drugs and prostitution
same-sex marriage

floating exchange rates

abolition of medical licenses
negative income tax

Chicago Boys (Chile)