And if the rule had been one that maintained a steady 2 percent rate of inflation, then a one-percentage-point increase would fall short of what had been anticipated, and unemployment would rise.
The Legacy of the New Classical Macroeconomics The new classicals profoundly changed the technical underpinnings of modern macroeconomics.
Louis talks with EconTalk host Russ Roberts about the economics of Keynesian stimulus.
To fail to do so would result in economic losses and would be irrational.
Lucas argued that the answer depends on the policy rule.
The new classical macroeconomics is a school of economic thought that originated in the early 1970s in the work of economists centered at the Universities of Chicago and Minnesota—particularly, recipient of the Nobel Prize in 1995 , Thomas Sargent, Neil Wallace, and corecipient of the Nobel Prize in 2004.
These different trade-offs suggest that there is a different Phillips curve for each policy rule.
Consider the Phillips curve again.