Business: Back to the Dismal Science

A revolution of falling expectations is spreading among U.S. economists. For years they have thought that if the right mix of policies could be found, the nation could enjoy full employment with reasonable price stability. Growing numbers now fear that the goal has become unattainable and that for years to come the world's mightiest economy will produce both more unemployment and more inflation than scholars in the past have defined as acceptable.

For the past dozen years, the official definition of "full employment," at least as a target that the Government should try to reach by fiscal and monetary policy, has been...

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