Friedman and Lucas on the Phillips Curve: From a Disequilibrium to an Equilibrium Approach

Michel De Vroey

Eastern Economic Journal, 2001, vol. 27, issue 2, 127-148

Abstract: In this paper I compare Friedman's expectations-augmented Phillips Curve model with Lucas' model on expectations and the neutrality of money and claim that they are underpinned by two different equilibrium concepts. Friedman's model is based on the stationary equilibrium conception, typical of the Marshallian research program. In contrast, Lucas' conception of equilibrium is an outgrowth of the Walrasian conception of equilibrium. In particular, I underline that Friedman's model is a disequilibrium model--witnessing to the fact that disequilibria are a standard outcome whenever the Marshallian conception of equilibrium is adopted--whereas, on the contrary, no room exists for disequilibrium in Lucas' model.

Keywords: Equilibrium; Money; Phillips Curve; Walrasian (search for similar items in EconPapers)
JEL-codes: B22 E13 E31 E42 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:27:y:2001:i:2:p:127-148

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