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Few economists in the post-war period have made such a lasting impression on macroeconomic policy as Alban William Housego `Bill' Phillips. The empirical Curve, with which he is most often associated, examined wage inflation and unemployment data for the United Kingdom for 1861-1957, with a view to gauging the size of the equilibrant forces that would be necessary to reduce the swing of the business cycle `pendulum'. The idea of an inflation-unemployment `trade-off' derived from a glance at this Curve, was `snatched at' first by American Keynesians, and, in an extraordinarily brief period of time, it became the cornerstone of applied macroeconomics. In the process, much of the subtlety of Phillips' analysis was replaced by wishful thinking about the potency of macroeconomic manipulation. Phillips' zero inflation advocacy was, likewise, replaced by the belief that ongoing inflation would purchase sustainable reductions in unemployment. Keynesian advocates, in their moment of apparent triumph, gave a hostage to fortune which Milton Friedman, and others, brilliantly exploited, thus facilitating the monetarist counter-revolution.

ISBN: 185898145X


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