Robert J. Gordon and the introduction of the natural rate hypothesis in the Keynesian framework

Aurélien Goutsmedt (1, 2, 3) , Goulven Rubin (4)

1 CES - Centre d'économie de la Sorbonne
2 UP1 - Université Paris 1 Panthéon-Sorbonne
3 Chaire Energie & Prospérité
4 PHARE - Philosophie, Histoire et Analyse des Représentations Économiques

This article studies the dissemination of the Natural Rate of Unemployment Hypothesis (NRH) in macroeconomics during the 1970s, by studying the reaction of Robert J. Gordon to the argument of Milton Friedman (1968). In the early 1970s, Gordon displayed an empirical opposition to the NRH, arguing that the estimated parameter on expected inflation was below one, meaning that the adjustment of inflation in wages was not total. Confronting to new data and to the rise of inflation, Gordon adopted the NRH after 1973. Nevertheless the adoption anticipated any empirical proof of a parameter close to one. We explain that this conversion was due to Friedman's influence on Gordon, but also to the fact it did not prevent Gordon to support active stabilization policies. The article shows how a complex explanation of the 1960s and 1970s inflation was little by little replaced by the simpler accelerationist Phillips Curve. It enables to understand the dissemination of this particular Phillips Curve, relying on the NRH, as a process mainly led by economists close to the Keynesian framework.

Mots clés: Expectations; Natural rate of unemployment; Phillips curve; Stagflation; Robert J. Gordon; History of macroeconomics; Milton Friedman; Inflation

Domaines: Economies et finances

Aurélien Goutsmedt, Goulven Rubin. Robert J. Gordon and the introduction of the natural rate hypothesis in the Keynesian framework. 2018. ⟨halshs-01821825⟩