6 Collective choice theory indicates that strong political pressures exist that are likely to lead to a

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6 Collective choice theory indicates that strong political pressures exist that are likely to lead to a stop-go macropolicy with an inflationary bias. Such a policy will cause the annual inflation-unemployment points plotted on a Phillips curve diagram to rotate in a clockwise manner and spiral upward. The actual inflation-unemployment data imply that this is what happened during the post-1967 inflation.

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Essentials Of Economics

ISBN: 396414

2nd Edition

Authors: James D Gwartney; Richard Stroup; J R Clark

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