The early reception of the Phillips curve in the UK: evidence from the papers of the Council on Prices, Productivity and Incomes
After a long time in which the standard narrative introduced by Friedman (possibly among others) remained undisputed, the story of how the Phillips curve entered the academic debate has recently been put into question. One of the defects of the standard narrative is that, although based on the US case, it is usually presented, especially in the textbooks, as a one-fits-all explanation of how the Phillips curve was immediately received as an important instrument for policymaking. It is argued in this paper that this standard narrative does not fit the UK case. Based on the unpublished papers of the Council on Prices Productivity and Incomes, it is possible to show that, although it did not pass unnoticed in the UK debate on policymaking of the late 1950s/early 1960s, Phillips’s curve paper met a cold reception. When asked by the Council to give their opinions, many among the leading British economists of the period expressed a negative view of Phillips (1958). However, the same episode seems to confirm that, as already pointed out in Cristiano and Paesani (2018), Phillips’ curve paper was relevant in the context in which it appeared, even though not so much for its well-known estimate of the unemployment-inflation trade-off, as for its rather optimistic estimate of the level of unemployment that would have stabilised prices.
Area:
Keywords: Phillips curve, inflation, unemployment
Il paper è coperto da copyright.