Why is labour market adjustment so slow in Friedman's presidential address?

James Forder

Review of Keynesian Economics, 2018, vol. 6, issue 4, 461-472

Abstract: It is noted that Friedman (1968) suggested the adjustment to a change in the rate of inflation would take decades and that this is rather a long time. Various suggestions as to why Friedman may have said this are considered. It is argued that he may have had in mind not a more or less rational change in expectations, but something more like a change in the habits of thought. It is noted that if this is correct, his view on the point is not generally accepted.

Keywords: Friedman; expectations; Phillips curve (search for similar items in EconPapers)
JEL-codes: B2 E4 E5 (search for similar items in EconPapers)
Date: 2018
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