Journal Article The Aggregative Structure of Keynes's General Theory Get access Richard T. Froyen Richard T. Froyen University of North Carolina Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 90, Issue 3, August 1976, Pages 369–387, https://doi.org/10.2307/1886039 Published: 01 August 1976

This paper examines the shift in the relation between the inflation rate and the rate of growth of real output which has occurred in the United States over the past three decades, and attempts to assess the relative importance of three possible lines of explanation: a) the new classical view of the output-inflation tradeoff, initially specified by Lucas; b) the effect of supply-side shocks, such as energy prices; c) the effect of inflation variability on the natural rate of real output, as hypothesized by Milton Friedman. The paper concludes that b) and c) seem to have played a significant role in the observed shift from a positive to a negative correlation between the rate of inflation and the rate of real output growth, but that a) did not.