[M. Friedman's] INFLATION AND UNEMPLOYMENT (His Nobel Prize lecture, 1976)

자료: http://www.nobelprize.org/nobel_prizes/economics/laureates/1976/friedman-lecture.pdf

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An increased variability of actual or anticipated inflation may raise the natural rate of unemployment in two rather different ways.

First, increased volatility shortens the optimum length of unindexed commitments and renders indexing more advantageous [Gray (10)]. But it takes time for actual practice to adjust. In the meantime, prior arrangements introduce rigidities that reduce the effectiveness of markets. An additional element of uncertainty is, as it were, added to every market arrangement. In addition, indexing is, even at best, an imperfect substitute for stability of the inflation rate. Price indexes are imperfect; they are available only with a lag, and generally are applied to contract terms only with a further lag.

These developments clearly lower economic efficiency. It is less clear what their effect is on recorded unemployment. High average inventories of all kinds is one way to meet increased rigidity and uncertainty. But that may mean labor-hoarding by enterprises and low unemployment or a larger force of workers between jobs and so high unemployment. Shorter commitments may mean more rapid adjustment of employment to changed conditions and so low unemployment, or the delay in adjusting the length of commitments may lead to less satisfactory adjustment and so high unemployment. Clearly, much additional research is necessary in this area to clarify the relative importance of the various effects. About all one can say now is that the slow adjustment of commitments and the imperfections of indexing may contribute to the recorded increase in unemployment.

A second related effect of increased volatility of inflation is to render market prices a less efficient system for coordinating economic activity. A fundamental function of a price system, as Hayek(13) emphasized so brilliantly, is to transmit compactly, efficiently, and at low cost the information that economic agents need in order to decide what to produce and how to produce it, or how to employ owned resources. The relevant information is about relative prices - of one product relative to another, of the services of one factor of production relative to another, of products relative to factor services, of prices now relative to prices in the future. But the information in practice is transmitted in the form of absolute prices - prices in dollars or pounds or kronor. If the price level is on the average stable or changing at a steady rate, it is relatively easy to extract the signal about relative prices from the observed absolute prices. The more volatile the rate of general inflation, the harder it becomes to extract the signal about relative prices from the absolute prices: the broadcast about relative prices is as it were being jammed by the noise coming from the inflation broadcast [Lucas (18), (19); Harberger (11)]. At the extreme, the system of absolute prices becomes nearly useless, and economic agents resort either to an alternative currency, or to barter, with disastrous effects on productivity.

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[주]13. Hayek, F. A.. “The Use of Knowledge in Society.” American Economic Review 35 (September 1945): 519-530.