For a central bank to keep unemployment below the natural rate, it must keep outdoing itself, delivering inflation surprise after inflation surprise.
Hence, Friedman reasoned, Keynesians were wrong to pin a low rate of unemployment to a given, high rate of inflation.
To sustain unemployment even a little below the natural rate, inflation would need to accelerate year in, year out.
Friedman's and Phelps's natural rate became known as the “non-accelerating inflation rate of unemployment” (NAIRU).
弗里德曼和菲尔普斯的自然比率已成为众所周知的“非加速通胀型失业比率”(non-accelerating inflation rate of unemployment 简称NAIRU)。
No society could tolerate endlessly rising, or falling, inflation.
Phillips had observed a correlation in the data, but it was not one that policymakers could exploit in the long run.
“There is always a temporary trade-off between inflation and unemployment,” Friedman said. “There is no permanent trade-off.”
Nearly 50 years on, that remains the premise on which rich-world central banks operate.
When officials talk about the Phillips curve, they mean Friedman's temporary trade-off.
In the long run, they believe, unemployment will come to rest at the natural rate.
The idea has such influence partly because Friedman's and Phelps's contributions were so well timed.
Before 1968, America had had two years with unemployment below 4% and inflation below 3%.
But when Friedman spoke, prices were indeed accelerating; inflation rose to 4.2% in 1968.