“In most Western economies, the general relationship is not in fact between the rate of inflation and the level of unemployment, but between the rate of change of inflation and the rate of change of unemployment.”

— Paul Ormerod, book The Death of Economics

Part II, Chapter 6, Unemployment and Inflation, p. 130
The Death of Economics (1994)

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Paul Ormerod20

English economist

Robert Lucas Jr. (1937) American economist

"After Keynesian macroeconomics" 1978

“Once the true relationship between inflation and unemployment is understood, with luck and skill, a free lunch is possible.”

Paul Ormerod book The Death of Economics

Part II, Chapter 6, Unemployment and Inflation, p. 137
The Death of Economics (1994)

“Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other. If government spending is financed by borrowing from the commercial banks, it means credit expansion and inflation. If in the course of such an inflation the rise in commodity prices exceeds the rise in nominal wage rates, unemployment will drop. But what makes unemployment shrink is precisely the fact that real wage rates are falling.”

Ludwig von Mises book Socialism

Socialism (1922), Epilogue (1947)

“I don't care what the unemployment rate is going to be. It doesn't matter to me. My campaign doesn't hinge on unemployment rates and growth rates.”

Rick Santorum (1958) American politician

2012-03-20
Santorum: "I don't care" about unemployment rate
Sam
Jacobs
Chicago Tribune
http://www.chicagotribune.com/news/politics/sns-rt-us-usa-campaign-santorum-joblessbre82j0nb-20120320,0,7898443.story
2012-03-20
http://web.archive.org/web/20120322201518/http://www.chicagotribune.com/news/politics/sns-rt-us-usa-campaign-santorum-joblessbre82j0nb-20120320,0,7898443.story
2012-03-22

“There is a big logical jump between acknowledging the destructive nature of hyperinflation and arguing that the lower the rate of inflation, the better.”

Ha-Joon Chang book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism

Source: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism (2008), Ch. 7, There is inflation and there is inflation, p. 150

“We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment. We have just escaped from the highest rate of inflation this country has known; we have not yet escaped from the consequences: high unemployment. That is the history of the last twenty years.”

James Callaghan (1912–2005) Prime Minister of the United Kingdom; 1976-1979

Speech to the Labour Party Conference in Blackpool (28 September 1976), quoted in Labour Party Annual Conference Report 1976, p. 188 and James Callaghan, Time and Chance (Collins, 1987), p. 426. This part of his speech was written by his son-in-law, future BBC Economics correspondent Peter Jay
Prime Minister

“Let there be no doubt that our present rate of inflation is the main cause of our economic difficulties. There never has been a more mistaken piece of economic analysis than the view that we should accept inflation to avoid unemployment. Inflation today, so far from being an alternative to unemployment, is its main cause. If our rate of cost increase is allowed to continue close to twice that of the average for the developed world it will increasingly price us out of world markets. Employers…will have to restrict their activities and still more their labour force in response to mounting and uncontainable wage and salary bills.”

Roy Jenkins (1920–2003) British politician, historian and writer

Hugh Anderson Memorial lecture at the Cambridge Union (28 February 1975), quoted in The Times (1 March 1975), p. 2
1970s

“Inflation and Employment in capitalist countries, in my own view, the change is the other way around: the constraints on the pressure of demand tend to be excessive, with the result that unemployment is much greater than can be justified by the needs of resource-allocation, and the rate of economic growth is appreciably less than it could be.
The main reason for this is that the distribution of power and, ultimately, the distribution of incomes, changes in favor of labor the faster the economy grows and the nearer it is to full employment, and over a longer period it changes in favor of capital the greater the volume of unemployment. This is the real reason why the continuance of Keynesian policies after the war led to a recrudescence of long-discredited ideas that go by the name of “monetarism.” The main attraction of monetarism was not its intellectual simplicity— inflation is a matter of the money supply, period— but that it elevated the fear of inflation to the unique position which could not be justified by the experience of numerous countries who habitually suffer from it.”

Nicholas Kaldor (1908–1986) British/Hungarian economist

Nicholas Kaldor, Economics without Equilibrium (1985), p.37-38

“If you start adding it up, our real unemployment rate is 42%.”

Donald J. Trump (1946) 45th President of the United States of America

2015-08-20 <br class="br">Donald Trump Explains All <br class="br">TIME <br class="br">http://time.com/4003734/donald-trump-interview-transcript/. For a discussion of this figure, see "The Real Jobless Rate Is 42 Percent? Donald Trump Has a Point, Sort Of" http://www.nytimes.com/2016/02/11/upshot/the-real-jobless-rate-is-42-percent-donald-trump-has-a-point-sort-of.html?_r=0 by Neil Irwin, The New York Times (10 February 2016). <br class="br">2010s, 2015

“The time has come to speak out. Britain is now locked in a vicious spiralling interest rates…The net result of completing the vicious circle is that prices have increased, the rate of inflation has gone up, the money supply has increased, unemployment has gone up, the rate of bankruptcies has increased, the industrial base has been further eroded, the Government's borrowing requirement has increased and as a result there is more pressure to raise interest rates yet again, to be followed inevitably by the same vicious circle. It is this that must be broken.”

Edward Heath (1916–2005) Prime Minister of the United Kingdom (1970–1974)

Speech to the Federation of Conservative Students in Manchester (6 October 1981), quoted in The Times (7 October 1981), p. 6.
Post-Prime Ministerial

“In most Western economies, the general relationship is not in fact between the rate of inflation and the level of unemployment, but between the rate of change of inflation and the rate of change of unemployment.”

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