Inflation Policy and Unemployment Theory: The Cost-Benefit Approach to Monetary Planning

A major advance toward understanding the forces that lead to inflation and unemployment, this study takes a cost-benefit approach to monetary planning. Professor Phelps views a reduction of inflation by monetary means as a social investment and argues that such an investment must be subject to cost-benefit tests. By extending his analysis into questions of efficiency and resource allocation, he integrates the modern microeconomic theory of unemployment with the theory of optimal inflation. ...