Macroeconomics and the Phillips Curve Myth (Oxford Studies in the History of Economics) - Softcover

Forder, James

Softcover

ISBN 10: 0198819870 ISBN 13: 9780198819875

Publisher: Oxford University Press, 2018

Synopsis

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 breakthrough but 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 literature of the times shows that the idea of a negative relation between wage change and unemployment - supposedly Phillips' discovery - was commonplace in the 1950s, as were the arguments attributed to Friedman and Phelps by the conventional story. And, perhaps most importantly, there is scarcely any sign of the 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 of inflation 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 naïve as it has been portrayed.

About this title

About the Author

James Forder has been a senior teaching member of Oxford University since 1993 and is Andrew Graham Fellow and Tutor in Political Economy at Balliol College Oxford, where he is also Vice Master (Executive). He has taught at La Sorbonne and for Stanford University, and is Managing Editor of Oxford Economic Papers. He has previously researched on European integration and the economics of central bank independence. He was Senior Tutor of the Oxford University Business Economic Programme, and a member of the Council of Business for Sterling, in the days of the debate over British membership of the euro.

Edition details

• Publisher: Oxford University Press
• Publication date: 2018
• Language: English
• ISBN 10: 0198819870
• ISBN 13: 9780198819875
• Binding: Paperback
• Number of pages: 320