adaptive expectations

naive expectations

rational expectations

static expectations

can be a dynamic phenomenon, so it can evolve over time and can serve as a starting point for business cycles analysis.

assures full employment to everyone.

in the end, the economies inevitably converge to their natural states, no matter what the governments do.

is a static phenomenon, so that it does not evolve over time, and thus it is not useful in macroeconomics.

It's actually the opposite. Lucas critique was intended to prove that Friedman was wrong.

It's because all interventionist policies are wrong.

It says that solely empirical relationships cannot be used for policy guidance; however, these empirical relationships were central to Keynesian macroeconomic modelling.

 The failure of the Phillips curve was caused by this missing tendency of unemployment and inflation to converge to an equilibrium.

a natural consequence of business cycles, so neither the governments nor the central banks shall not aim to stabilize unemployment. The market reacts optimally, and Pareto efficiency is assured.

a proof of the existence of frictions on the labour market.

unnecessary consequences of government failures, but governments can avoid large unemployment rates via timely fiscal expansion.

inflationary, in particular, if the deviation is persistent, due to pressures on the labour market leading to a higher wage-growth.

Monetary policy shall focus on the stabilization of inflation because inflation is what matters for ordinary people. They wish to be sure that their savings will not lose their value in the future.

Interest rates are not the appropriate goal of monetary policy. Although monetary policy can affect them, it does so via changes in the money supply. Therefore, the central bank shall aim for stable and low growth of the money supply.

Low interest rates allow cheap borrowings to all sectors in the economy. However, they permit higher growth of fiscal expenditures financed by the debt creation. Large debts, however, inevitably lead to increased interest rates and defaults in the future.

Low interest rates permit investments with lower productivity. Therefore, low interest rates are harmful to long-run growth, which is driven by productive investments.