Macroeconomics and the Phillips Curve Myth

Hardcover | October 15, 2014

byJames Forder

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This book reconsiders the role of the Phillips curve in macroeconomic analysis in the first twenty years following the famous work by A W H Phillips, after whom it is named. It argues that the story conventionally told is entirely misleading. In that story, Phillips made a great breakthroughbut his work led to a view that inflationary policy could be used systematically to maintain low unemployment, and that it was only after the work of Milton Friedman and Edmund Phelps about a decade after Phillips' that this view was rejected. On the contrary, a detailed analysis of the literatureof the times shows that the idea of a negative relation between wage change and unemployment - supposedly Phillips' discovery - was commonplace in the 1950, as were the arguments attributed to Friedman and Phelps by the conventional story. And, perhaps most importantly there is scarcely any sign ofthe idea of the inflation-unemployment tradeoff promoting inflationary policy - either in the theoretical literature or in actual policymaking. The book demonstrates and identifies a number of main strands of the actual thinking of the 1950s, 1960s, and 1970s on the question of the determination ofinflation and its relation to other variables.The result is not only a rejection of the Phillips curve story as it has been told, and a reassessment of the understanding of the economists of those years of macroeconomics, but also the construction of an alternative, and historically more authentic account of the economic theory of those times.A notable outcome is that the economic theory of the time was not nearly so naive as it has been portrayed.

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This book reconsiders the role of the Phillips curve in macroeconomic analysis in the first twenty years following the famous work by A W H Phillips, after whom it is named. It argues that the story conventionally told is entirely misleading. In that story, Phillips made a great breakthroughbut his work led to a view that inflationary ...

James Forder has been a senior teaching member of Oxford University since 1993 and is Tutor in Political Economy at Balliol College Oxford, where he is also Vice Master. He has previously taught at La Sorbonne and for Stanford University, and is Managing Editor of Oxford Economic Papers. He has previously researched on European integra...

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Format:HardcoverDimensions:320 pages, 9.21 × 6.14 × 0.01 inPublished:October 15, 2014Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0199683654

ISBN - 13:9780199683659

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Table of Contents

Introduction1. The Curve of Phillips2. The Role of Samuelson and Solow3. The Phillips Curve Literature before Friedman's Presidential Address4. The Post-1968 Literature5. Attitudes to Inflation6. Policymaking and Histories of Policymaking7. Explaining the Emergence of the Myth8. Conclusions