Economists Are Clueless on How Low Unemployment Can Fall Without Causing Spiraling Inflation

Neil Irwin wrote the piece I have been waiting for pretty much forever. He points out that economists estimates of the "non-accelerating inflation rate of unemployment (NAIRU)" have been repeatedly shown to be hugely wrong. In the 1990s, the accepted wisdom was that this number was close to 6.0 percent, with estimates falling on both sides of this number. Yet, the unemployment rate fell to 4.0 percent as a year-round average in 2000 without any noticeable uptick in the inflation rate.

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