Once Again, There is Too a Short-Run Phillip's Curve

One more time, There is Too a Short-Run Phillips Curve. This commentary disagrees with economists who claim there is a permanent inflation-unemployment tradeoff. However, it's been quite a long-time since anyone seriously suggested a permanent tradeoff between inflation and unemployment, particularly since Phelps, Friedman, Lucas and others came up with came up with the expectations augmented short-run Phillips curve to rebut this idea. Thus, the commentary below strikes at a position - a permanent tradeoff between inflation and output - that no economist that I know of holds. It is the nature of the short-run Phillip's curve that is at issue, how long the short-run tradeoff persists, the steepness of the tradeoff, whether hybrid versions of the Phillips curve are needed, etc., and contrary to what is stated in this commentary, the existence of a short-run Phillip's curve is well-accepted. I do agree with the commentary's suggestion that somebody doesn't understand this literature, but I doubt very much that it is Bernanke, Mishkin, and others at the Fed that are the ones missing key pieces of this line of research:...more>>