Unemployment and Inflation: Institutionalist and Structuralist Views, A Review Article
The last decade or so has seen a flurry of activity and an abundance of writings by economists in the areas of inflation and unemployment theory. This is to be expected, given the economic conditions of the times. For more than ten years, developed market capitalism has been plagued with inflation that has often reached double-digit proportions and, far from showing signs of abatement, gives every indication of becoming more serious during the 1980s.' As if these matters were not bad enough, for the last six or seven years, market capitalism has also suffered from economic stagnation. In virtually every developed capitalist economy, growth in per capita incomes, GNP, and the various economic amenities of life has slowed, and unemployment rates have risen compared to each country's record in the 1950s and 1960s. Until the advent of stagflation, that is, the simultaneous occurrence of inflation and stagnation, the conventional wisdom maintained that high rates of inflation would only occur if unemployment rates were exceptionally low; while the recent high rates of unemployment would suggest that inflation is proceeding, at worst, at a slow creep. But the conventional downward-sloping Phillips curve seems to be no more, suggesting that