Robert J. Gordon is an American macroeconomist, Stanley G. Harris Professor Emeritus at Northwestern University and Research Associate at NBER. He is best known for developing the "triangle model" of inflation (Gordon 1975, 1982) — a Phillips Curve specification that decomposes inflation into inertia, excess-demand, and supply-shock components — and for extensive empirical work on productivity, the Great Moderation, and the NAIRU. His 2005 NBER working paper attributing the Great Moderation primarily to supply shocks and IS shifts, rather than improved monetary policy, is one of the most detailed structural decompositions of U.S. macro volatility.
Triangle model of inflation: Formalised the three-sided Phillips Curve with explicit supply shock variables and the natural-rate restriction. The model became a workhorse for NAIRU estimation and inflation decomposition.
Time-varying NAIRU: Gordon's Kalman-filter approach estimates the U.S. NAIRU as a random walk; omitting supply shocks forces the NAIRU artificially above 8% during the 1970s. Estimated path: stable 5.6–6.3% (1962–88), falling to 4.5% minimum (1998), rising to 4.85% (2004Q4).
Great Moderation decomposition (Gordon 2005): Using a four-equation structural model, attributes ~80% of pre-1984 inflation variance to five named supply shocks and ~80% of post-1984 output volatility decline to within-component stabilisation. Three sectors (residential investment, inventory investment, Federal government spending) account for ~50% of the GDP variance reduction despite representing only 13–17% of nominal GDP.
Greenspan ≈ Burns after AR(1) correction: The most provocative finding in Gordon (2005) — after correcting for positive serial correlation in the Taylor Rule via FGLS, the Greenspan-era (1990–2004) inflation coefficient collapses from 1.43 to 0.57, statistically identical to the Burns-era coefficient (0.57). Only the Volcker era (1.46) is genuinely inflation-fighting.
Sacrifice ratio: Gordon and King (1982) developed an influential framework for estimating the output cost of disinflation. Gordon (2005) estimates the actual 1981–85 sacrifice ratio at 3.5 vs. a Volcker-vs.-Greenspan counterfactual of 7.6, attributing the gap to ~⅓ of disinflation coming from supply-shock reversal (oil price fall, dollar appreciation) rather than tight money alone.