Texas Tech University

Problems With the Market Monetarist Approach to "Explaining" the Economy

Robert P. Murphy

May 21, 2018

Mises Institute - Many economists who subscribe to some version of the Phillips Curve have been puzzled by the tepid nominal wage growth in recent years, even though the official unemployment rate has collapsed and we should be in “overheating” territory at this point.

Obviously Jimmy's flippant response is not as ludicrous as Scott Sumner's explanation of sluggish wage growth, but if you can spot the problems with Jimmy's response, then you can see the analogous shortcomings in Sumner's.

Robert P. Murphy is a Senior Fellow with the Mises Institute and Research Assistant Professor with the Free Market Institute at Texas Tech University. He is the author of many books including Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015) which is a modern distillation of the essentials of Mises's thought for the layperson. Murphy is co-host, with Tom Woods, of the popular podcast Contra Krugman, which is a weekly refutation of Paul Krugman's New York Times column.

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