In 1968, economist Milton Friedman published a paper that was critical of the Phillips curve. On what grounds did Friedman criticize the Phillips curve?
A)It seemed to work for wages but not for inflation.
B)Monetary policy was ineffective in combating inflation.
C)The Phillips curve did not apply in the long run.
D)Phillips had made errors in collecting his data.

Question

Quizplus · Accepted Answer

Friedman criticized the Phillips curve on the grounds that it did not apply in the long run. He argued that in the long run, the relationship between unemployment and inflation was not stable and that the Phillips curve was only valid in the short run. Friedman believed that attempts to exploit the short-run tradeoff between inflation and unemployment would only result in higher inflation without any lasting benefits for employment.

In 1968, Economist Milton Friedman Published a Paper That Was