Re: [OPE] The rising NAIRU

Allin,

the NAIRU allows the user to treat the 'minimal' unemployment rate to which
you refer as a 'natural' consequence of the system. The whole process
circles around such a rate. In general this seems to be the case, so that
the idea of displacing Friedmans ideas seems never really to have been on.
I don't quite understand how 'centrist and leftish economists' intended
their argument to be anti Friedmanite however, since it is used by
'Friedmanites' against Keynesians, and seems always to have been wielded (
thinkingly) Phelps and suchlike.

Maybe you could trace its 'leftish' history for me?

Cheers

Paul Bullock

----- Original Message -----
From: "Allin Cottrell" <cottrell@wfu.edu>
To: "Outline on Political Economy mailing list" <ope@lists.csuchico.edu>
Sent: Wednesday, July 08, 2009 1:31 AM
Subject: RE: [OPE] The rising NAIRU

> On Sun, 5 Jul 2009, GERALD LEVY wrote:
>
>> Yes, Paul B. In more general terms, I think Marxians (and
>> progressive social theorists) should be extremely suspicious
>> of any claim about what is "natural"...
>
> The so-called "natural" rate of unemployment is clearly specious,
> but notice that the 'N' in NAIRU does not stand for "Natural":
> it's the "Non-Accelerating Inflation Rate of Unemployment".
>
> The idea is that in any given economy at any given time, there
> exists a minimal rate of measured unemployment, below which
> inflation will tend to accelerate. It's difficult to make this
> operational -- to give an actual number -- and attempts to give a
> number, or even a direction of change of the number in a given
> conjuncture, may well be ideological.
>
> All the same, the concept is not nonsensical. It's easy enough to
> accept that a capitalist economy with a measured unemployment rate
> of, say, 1 percent (if that were even possible) would be seriously
> "overheated". This would be below the rate (it used to be
> called "frictional unemployment") that represents the normal
> movement of people between occupations and locations.
>
> The "NAIRU" terminology was an explicit attempt by centrist and
> leftish economists to displace Milton Friedman's notion of a
> natural rate of unemployment. Of course, it may have been
> hijacked since.
>
> Allin Cottrell
> _______________________________________________
> ope mailing list
> ope@lists.csuchico.edu
> https://lists.csuchico.edu/mailman/listinfo/ope
>

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Received on Wed Jul 8 04:43:21 2009