The Fed’s Phillips Curve Isn’t Dead—-It Never Existed

In a front page story yesterday, Timiraos reported the Fed’s standard Phillips Curve view even though the latter has long been discredited.  Timiraos asked “[H]ow low can the U.S. unemployment rate safely go?” His analysis presumes there are limits to growth.  Timiraos is convinced that if too many Americans are working, that the latter will result in inflation.  Nothing could be further from the truth.