Jordi Galí and Olivier Blanchard have called this property the'divine coincidence', and have argued that more realistic models which include additional frictions (such as frictional unemployment) imply a tradeoff between stabilizing inflation and stabilizing the output gap.
Jordi Galí have called this property the'divine coincidence'. Olivier Blanchard have called this property the'divine coincidence'. More realistic models (such as frictional unemployment) imply a tradeoff between stabilizing inflation and stabilizing the output gap. This was what Jordi Galí and Olivier Blanchard have argued. These More realistic models include additional frictions.