{"id":1507,"date":"2018-10-29T08:07:40","date_gmt":"2018-10-29T15:07:40","guid":{"rendered":"http:\/\/www.thomaspalley.com\/?p=1507"},"modified":"2018-10-29T08:07:40","modified_gmt":"2018-10-29T15:07:40","slug":"recovering-keynesian-phillips-curve-theory-hysteresis-of-ideas-and-the-natural-rate-of-unemployment","status":"publish","type":"post","link":"https:\/\/thomaspalley.com\/?p=1507","title":{"rendered":"Recovering Keynesian Phillips curve theory: hysteresis of ideas and the natural rate of unemployment"},"content":{"rendered":"<p>Economic theory is prone to hysteresis. Once an idea is adopted it is difficult to change. In the 1970s, the economics profession abandoned the Keynesian Phillips curve and adopted Milton Friedman\u2019s natural rate of unemployment (NRU) hypothesis. The shift was facilitated by a series of lucky breaks. Despite much evidence against the NRU, and much evidence and theoretical argument supportive of the Keynesian Phillips curve, the NRU hypothesis remains ascendant. The hypothesis has had an enormous impact on macroeconomic theory and policy. 2018 is the fiftieth anniversary of Friedman\u2019s introduction of the NRU hypothesis. The anniversary offers an opportunity to challenge, rather than celebrate it. <a href=\"https:\/\/www.boeckler.de\/pdf\/p_fmm_imk_wp_26_2018.pdf\">[READ MORE]<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Economic theory is prone to hysteresis. Once an idea is adopted it is difficult to change. In the 1970s, the economics profession abandoned the Keynesian Phillips curve and adopted Milton Friedman\u2019s natural rate of unemployment (NRU) hypothesis. The shift was facilitated by a series of lucky breaks. Despite much evidence against the NRU, and much [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,7],"tags":[],"class_list":["post-1507","post","type-post","status-publish","format-standard","hentry","category-economics","category-political-economy"],"_links":{"self":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/1507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1507"}],"version-history":[{"count":2,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/1507\/revisions"}],"predecessor-version":[{"id":1509,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/1507\/revisions\/1509"}],"wp:attachment":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}