Although the efficiency costs associated with high inflation were acknowledged, the costs were thought to be associated mostly with changes in the underlying rate of inflation--particularly unexpected changes. In addition, many economists argued that the efficiency costs of inflation were not particularly large. 5 Milton Friedman once again was in the vanguard on this issue.
In his 1977 Nobel Prize address, Friedman laid out the modern argument--that, because it harms the efficient operation of markets, high inflation is more likely to raise unemployment than to lower it--and he used the experience of the 1970s to illustrate his point.