The Myth Of A Natural Jobless Rate

The Federal Reserve has again voted to leave interest rates alone, despite a continuing recovery and low unemployment. So it's time to bury the idea of a natural rate of unemployment, or NAIRU, nonaccelerating inflation rate of unemployment. The claim, you will recall, is that bringing unemployment below its "natural rate" is both futile and dangerous: futile, because the economy is doing the best it can; dangerous because an overheated economy triggers accelerating inflation that is hard to reverse.

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