In this paper I evaluate the theoretical consistency of Friedman.s Phillips curve. For this, I review his own exposition in the subject, making emphasis in his contributions to the short-run analysis of unemployment, wages and prices in front of the classical theory and Keynes.s .General Theory.. I examine his hypothesis founded in the natural rate of unemployment, looking at the use of concepts like involuntary unemployment, macroeconomic equilibrium and imperfect information, and also at the mechanism of expectation.s formation for workers and entrepreneurships. My conclusion is that his model is incomplete and imperfect, and that his hypothesis tumbles down if the natural rate of unemployment is endogenous and changes with the exogenous chocks in aggregate demand.
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Article provided by Universidad de Antioquia, Departamento de Economía in its journal LECTURAS DE ECONOMÍA.
Volume (Year): (2007) Issue (Month): 67 (Julio-Diciembre) Pages: 119-142 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
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