Also see Phelps  for analysis very similar to that of Friedman.
See Akerlof and Yellen (1985) and Mankiw (1985).
Near-Rational Wage and Price Setting and the Optimal Ratesof Inflation and Unemployment
George A. Akerlof, William T. Dickens, and George L. PerryOver thirty years ago, in his Presidential Address to the American Economic Association,Milton Friedman  asserted that in the long run the Phillips Curve was vertical at a naturalrate of unemployment that could be identified by the behavior of inflation.
Unemploymentbelow the natural rate would generate accelerating inflation—above it, accelerating deflation.Five years later the New Classical economists posed a further challenge to the stabilizationorthodoxy of the day. In their models with rational expectations, not only was monetary policyunable to alter the long term level of unemployment, it could not even contribute to stabilizationaround the natural rate (see, for example, Lucas , Sargent [1973)].) The New KeynesianEconomics has shown that even with rational expectations small amounts of wage and pricestickiness permit a stabilizing monetary policy.
But the idea of a natural unemployment ratethat is invariant to inflation still characterizes macro modeling and informs policy making.The familiar empirical counterpart to the theoretical natural rate is the nonacceleratinginflation rate of unemployment, or NAIRU. Phillips curves embodying a NAIRU are estimatedusing lagged inflation as a proxy for inflationary expectations. NAIRU models appear in mosttextbooks and estimates of the NAIRU—which is assumed to be relatively constant—are widelyused by economic forecasters, policy analysts and policy makers. However the inadequacy of such models has been demonstrated forcefully in recent years as low and stable rates of inflation