The "natural rate" or "accelerationist" hypothesis or theory of inflation, advanced by Milton Friedman (1966) (1968) and E. S. Phelps (1967) (1968), among others, has provoked a great deal of controversy. The rcsulting literature has included some important theoretical developments as well as numerous attempts a t empirical testing.1 The purpose of the present paper is to comment on some of the 111ore notable items in this literature. More specifically, we shall discuss the pioneering empirical test of R. M. Solow (1969) and the recent theoretical reformulation due primarily to R. E. Lucas (1972) and T. J. Sargent (1973).
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