On August 1, 1957, Procter & Gamble, the nation’s leading manufacturer of soaps, detergents, and other high turn-over household products, acquired Clorox Chemical Company, the nation’s leading producer of liquid bleach. Purex Corporation, the second leading producer of liquid bleach, brought suit, challenging the acquisition as violative of the Clayton Act. At the time of the acquisition, Clorox held 48.8 percent of sales and Purex held 15.7 percent of sales. Purex says the enormous financial strength, advertising budget, and marketing skills of Procter & Gamble would make it nearly impossible for any bleach manufacturer to compete. What factors are important in determining whether the merger is a valid one?
The discovery of the Phillips curve generated a heat- ed debate about its implications for economic policy. In particular, research focused on whether a monetary authority such as the Federal Reserve could “buy” less unemployment at the cost of faster inflation. Some argued that the existence of a Phillips curve implied that unemployment could be permanently lowered if inflation were kept at a permanently higher level. Others, in par- ticular Friedman (1968) and Phelps (1968), argued that there was an inflation-unemployment trade-off in the short run but not in the long run. In justifying their the- sis, Friedman and Phelps coined the term “natural rate of unemployment.”
April 14, 2018
10:46 am
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