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THE LONG RUN PHILLIPS CURVE AND THE GOVERNMENT BUDGET CONSTRAINT
Author(s) -
PEMBERTON JAMES
Publication year - 1984
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/j.1467-9485.1984.tb00477.x
Subject(s) - phillips curve , proposition , constraint (computer aided design) , economics , budget constraint , government (linguistics) , short run , keynesian economics , macroeconomics , econometrics , mathematical economics , microeconomics , mathematics , monetary policy , geometry , philosophy , linguistics , epistemology
This paper considers the proposition that the long run Phillips Curve is vertical except in special cases. It argues that this proposition cannot be sustained once the implications of the government budget constraint are considered. It is then a matter for government policy choice whether the long run Phillips Curve is vertical or non‐vertical, and neither case can be considered more general than the other.