ABSTRACT

Rarely have so many economists of prominence and influence been as united as they were three years ago around the idea of the non-accelerating inflation rate of unemployment (NAIRU), the proposition that an unemployment rate below 6 percent was a dangerous thing. Those of us who advocated lower unemployment rates were a cranky fringe, not admitted to serious policy discussions and carefully excluded from the higher circles of the academy. But three ensuing years of unemployment far below 6 percent, without rising inflation, have left no doubt, even in the most skeptical minds, as to who was right and who was wrong in that discussion.