Hall and Hart (2012) managed to obtain an upward-sloping
Phillips curve for the US using annual data by including
observations for World War II years when unemployment was
very low and the economy was subject to price controls
-- when most prices were set by the Office of Price
Administration and could not adjust to excess demand,
so that the official inflation rate for those years is
meaningless for investigating the relationship between
unemployment and inflation. The attention of Hall and
Hart was drawn to this problem with their results in
referee's comments when they submitted their paper to
another journal. They dealt with this issue in their
History of Economics Review article by ignoring it, as
if they had never heard of it.
Robert Dimand
Quoting Robert Leeson <[log in to unmask]>:
> The Samuelson and Solow curve - when econometrically estimated,
> rather than drawn by hand - is, in places, upward-sloping not
> downward-sloping, as drawn.
>
> Thomas E. Hall and William R. Hart 2012. The Samuelson-Solow
> "Phillips Curve" and the Great Inflation. History of Economics
> Review Issue 55 (Winter)
>
> ----- Original Message -----
> From: "James Forder" <[log in to unmask]>
> To: [log in to unmask]
> Sent: Thursday, 17 April, 2014 6:27:49 AM
> Subject: [SHOE] Samuelson and Solow on the Phillips curve
>
> Indeed, there was only one Bill Phillips. Samuelson and Solow did
> use Phillips' name in connection with an inflation-unemployment
> relation (and recognise the point about expectations). I think the
> question of whether it is quite right to say they put the curve at
> the centre of attention is more difficult. One little point is that
> no one seems to have followed S & S in using the label 'Phillips
> curve' for an inflation-unemployment relation. That terminology is
> hardly used until Friedman and Phelps adopt it in 1966/7/8. A larger
> one is that despite what is commonly said (not by Anthony Waterman
> below), they seem to have had no influence at all in leading opinion
> in the direction of an exploitable tradeoff. On this:
> http://www.economics.ox.ac.uk/Department-of-Economics-Discussion-Paper-Series/economists-on-samuelson-and-solow-on-the-phillips-curve
>
> The extent to which the Phillips curve *was* central in the
> economics of the 1960s is yet another matter, and a large one.
> Perhaps I might just say I think it is easy to exaggerate!
>
> James Forder
> [log in to unmask]
>
> On 13 Apr 2014, at 10:52, Anthony Waterman <[log in to unmask]> wrote:
>
>> The real Bill Phillips was a New Zealander, trained in electrical
>> engineering, who was a pioneer in mathematical modelling of dynamic
>> macroeconomics. His famous article was indeed published in
>> Economica, almost immediately followed by an attempt at theoretical
>> justification by his Canadian colleague at LSE, Dick Lipsey.
>>
>> From the standpoint of history of economic thought, what put the
>> 'Phillips Curve' at the centre of attention in the 1960s was the
>> paper by Samuelson and Solow at the AEA 1959 which transformed the
>> inflation/unemployment relation into one between PRICE inflation
>> and unemployment. S and S recognised that this would be
>> expectationally unstable but supposed that would be unimportant in
>> the short run.
>>
>> Anthony Waterman
>>
>>
>> On 13/04/2014 11:06 AM, Giancarlo de Vivo wrote:
>>> I would have said that the article by AWH Phillips on the famous
>>> Phillips Curve was published in 1958 (Economica), not 1954, that
>>> in any case it dealt with a (statistical) relation between the
>>> rate of change in the wage rate and the rate of unemployment (in
>>> the UK economy), and that in any case Phillips in 1953 was 39
>>> (born in 1914), and, far from being an undergraduate, he was about
>>> to be made a Reader at the LSE (in 1954). Or is there another
>>> Phillips, and another Phillips Curve?
>>>
>>> Giancarlo de Vivo
>>>
>>>
>>>
>>> Il giorno 13/apr/2014, alle ore 05.57, Robert Leeson ha scritto:
>>>
>>>> The Phillips curve (1954) was a theoretical relationship between
>>>> the rate of change of prices and the level of production.
>>>> Inflationary expectations play a crucial role in Phillips' model
>>>> - it made the system unstable.
>>>>
>>>> Whilst attempting to empirically locate his curve, Phillips had
>>>> difficulty with price data and so took-up Henry Phelps Brown's
>>>> offer of the use of wage data, which he then combined with
>>>> unemployment data.
>>>>
>>>> Friedman's (1953) clear statement about contemporary notions of a
>>>> Phillips curve trade-off was written while Phillips was an
>>>> undergraduate and therefore does not use the term "Phillips
>>>> curve" (which was not used until the 1959 AEA meetings).
>>>>
>>>> RL
>>>>
>>>> ----- Original Message -----
>>>> From: "Alan G Isaac" <[log in to unmask]>
>>>> To: [log in to unmask]
>>>> Sent: Saturday, 12 April, 2014 10:13:58 PM
>>>> Subject: Re: [SHOE] Critiques of Keynesian Economics and the Stimulus
>>>>
>>>> On 4/12/2014 12:34 AM, Robert Leeson wrote:
>>>>> In the 'Case for Flexible Exchange Rates', Friedman (1953,
>>>>> 200) argued that removing the fixed exchange rate
>>>>> constraint allowed each country to pick a point on
>>>>> a ?Phillips curve? ?according to its own lights ? flexible
>>>>> exchange rates are a means of combining interdependence
>>>>> among countries through trade with a maximum of internal
>>>>> monetary independence?.
>>>>
>>>> Just to be clear, as I do not have the essay at hand,
>>>> it does not speak of Phillips and certainly not
>>>> of a Phillips curve, right? Phillips's Economica paper,
>>>> published in 1958, addressed wage behavior not
>>>> price behavior. Friedman's essay does
>>>> acknowledge wage rigidity as a possible source of
>>>> unemployment, but that is quite different.
>>>>
>>>> Thank you,
>>>> Alan Isaac
>>>>
>>>
>>> ******************************
>>>
>>> Giancarlo de Vivo
>>>
>>> Dipartimento di Economia, Management, Istituzioni
>>> Università di Napoli "Federico II"
>>> via Cinthia - Monte S. Angelo
>>> 80126 Napoli
>>>
>>> tel. +39.081.675049
>>>
>>>
>>>
>>
>
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