Adaptive Expectations and Phillips Curve: A Comparison of Them with other Macroeconomic Schools and Their Relevance for DCs, LDCs and NICs

Abstract

The focus of this article is the "adaptive expectations hypothesis" of Milton Friedman and his analysis of short-run and long-run Phillips Curve. In order to analyze these contributions of M. Friedman more clearly, discussions about the Phillips Curve and different views about this issue according to various macroeconomic schools and information about the evolution of the Phillips Curve Analysis are given. In this sense, apart from Milton Friedman and Monetarists, Phillips Curve was analyzed in a successive order compatible with the history of discussion within Keynes and Keynesian economics, New Keynesian Economics and New Classical School operating with "rational expectations hypothesis".Keywords: Adaptive Expectations, Phillips Curve