The Importance of Predictions

In 2000, the conventional wisdom in the United States was that if the unemployment rate got much below 6%, inflation would begin to spiral upward. In 2014, the median estimate among members of the Federal Reserve Board, the open market committee that determines our interest rates, was that the unemployment rate couldn't get below 5.4%. That was their estimate of the non-accelerating inflation rate of unemployment. And we've seen now the unemployment rates falling below 4%, 3.7 in the latest numbers. So I guess your answer would be that you have a pretty compelling and intuitive causal explanation.