Epilogue
Policy and Practice: Where Do Macroeconomists Agree and
Disagree?
◼ Chapter Outline, Overview, and Teaching Tips
Chapter Outline
Where Macroeconomists Agree
Inflation Is Always and Everywhere a Monetary Phenomenon
Where Macroeconomists Disagree
Flexibility of Wages and Prices
How Much Time It Takes to Get to the Long Run
The Future of Business Cycle Theory
Chapter Overview and Teaching Tips
Macroeconomists are a contentious lot, and as an epilogue of the book, it is worth pointing out where
macroeconomists agree and disagree. Although this epilogue will best be understood by students if they
The epilogue first lays out ten areas where macroeconomists generally agree:
1. Inflation is always and everywhere a monetary phenomenon.
260 Mishkin • Macroeconomics: Policy and Practice, Second Edition
2. Price stability is beneficial.
3. There is no long-run tradeoff between unemployment and inflation.
7. Central bank independence is valuable.
8. Commitment to a nominal anchor produces better economic outcomes.
The epilogue then outlines six basic issues on which macroeconomists still have major disagreements:
1. The flexibility of wages and prices
2. How much time it takes to get to the long run
3. The sources of business cycle fluctuations