# Natural Rate of Unemployment The **natural rate of unemployment** — closely related to the NAIRU, the non-accelerating-inflation rate of unemployment — is the unemployment rate consistent with stable inflation once expectations have adjusted. Milton Friedman and Edmund Phelps introduced it in 1967–68 to argue that the [[Phillips Curve]] tradeoff is only temporary. It cannot be observed and must be estimated, which is why the FOMC treats maximum employment under the [[Dual Mandate]] as a level to be assessed rather than a fixed number. ## See also - [[Phillips Curve]] · [[Dual Mandate]] · [[Unemployment Rate]] · [[Milton Friedman]] · [[Stagflation]]