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Working Paper 1985-006A

"Inflation Uncertainty and a Test of the Friedman Hypothesis"
by R. W. Hafer

This paper tests Friedman's (1977) hypothesis that increases in inflation uncertainty, ceteris paribus, may yield higher levels of unemployment. Tests are made using quarterly measures of inflation uncertainty taken from the ASA-NBER survey. Using the 1972-1984 period, we find general support for the hypothesis.

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Category > Monetary Policy/Macroeconomics