McCallum's exercise indicates why econometric modelers found increasing evidence for the accelerationist hypothesis as the evidence from the 1970s was added.
To put the excerpt in context, Tobin's review described the accelerationist hypothesis as having been a core part of macroeconomics for the better part of the previous decade.
If the accelerationist hypothesis is violated--which we consider especially likely when inflation is initially low the returns to stabilization policy may be quite high.
Indeed, the most persuasive critique of Lucas's case against stabilization policy comes if the accelerationist hypothesis is violated.
Such survey findings do not prove false the accelerationist hypothesis.
In our view, the evidence from such episodes is grossly inconsistent with the traditional accelerationist hypothesis enshrined in modern macroeconomics textbooks.
Our theorem suggests that a natural way to test the generality of the adaptive-expectations accelerationist hypothesis is to examine data on inflation during periods with prolonged high unemployment.
In each country, we see a period of deflation following the onset of both downturns, but no tendency toward the cumulative and accelerating decline in inflation predicted by the accelerationist hypothesis with adaptive expectations.
The behavior of inflation, as measured by the change in the core CPI since the beginning of the respective downturn, is again largely inconsistent with the adaptive expectations accelerationist hypothesis.
The data in Figure 5 support the interpretation that downward nominal wage rigidity is to blame for the breakdown of the adaptive-expectations accelerationist hypothesis.
data by testing restrictions that the accelerationist hypothesis places on inflation dynamics.