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Milton Friedman's presidential address to the American Economic Association holds a mythical status as the harbinger of the supply-side counter-revolution in macroeconomics – centred on the rejection of the long-run Phillips-curve inflation–unemployment trade-off. Friedman (seconded by Edmund Phelps) argued that the long run is determined by ‘structural’ forces, not demand, and his view swept the profession and dominated academic economics and macro policymaking for four decades. Friedman, tragically, put macroeconomics on the wrong track which led to disaster: secular stagnation, rising inequality, mounting indebtedness, financial fragility, a banking catastrophe and recession – and no free lunches. This is Friedman's legacy. We have to unlearn the wrong lessons and return macroeconomics to the right track. To do so, this paper shows that Friedman's (and Phelps's) conclusions break down in a general model of the long run in which productivity growth is endogenous – aggregate demand is driving everything again, short and long.
Friedman's presidential address was about ‘The role of monetary policy’. Its famous discussion of inflation–unemployment interrelationships was subservient to this broader topic. The program it promoted influenced monetary policy in the 1970s and early 1980s with mixed results, but enough of it survived to be a clearly visible influence on today's inflation-targeting regimes.
It is noted that Friedman (1968) suggested the adjustment to a change in the rate of inflation would take decades and that this is rather a long time. Various suggestions as to why Friedman may have said this are considered. It is argued that he may have had in mind not a more or less rational change in expectations, but something more like a change in the habits of thought. It is noted that if this is correct, his view on the point is not generally accepted.
Yves Botteman and Daniel Barrio Barrio
An area of uncertainty, and with differences of approach between competition authorities, is whether brand owners can prevent distributors from reselling their products via online marketplaces such as Amazon. This article considers the European Court of Justice's judgment in Coty and its implications for distribution arrangements, as regards both the application of Article 101 TFEU and the Vertical Restraints Block Exemption Regulation to selective distribution arrangements and restrictions on internet sales via third-party platforms. It also considers the European Commission's response to the Coty judgment (including its application to non-luxury goods) and the approach taken by national courts and competition authorities.