> When estimated, the S and S PC is positively sloped:
> reducing unemployment also reduces inflation (i.e.
> unbelievable)

Interestingly, Hayek gave some interviews where he suggests a long run positive Phillips curve- the destabilizing affects of inflation would cause increased unemployment.

> How many economists 
> 
> a. have read the 1954 theory that Phillips provided for his
> curve (and know about the accidental circumstances by which
> he was obliged to use a labour market model in his empirical
> piece)?

Rather few. I (we) did, in grad school at UConn, 20 years ago.


> b. realise that Friedman derived his expectations
> augmentation directly from Phillips?  


Very few, but what I argued before was that the popular textbook version, whereby workers have static expectations, is dead and gone. This brings up another question: how did the apparently false (as pointed out by Alan) popular view of the Phillips Curve become popular? To quote ALan - "I would be interested to see article citations suggesting any kind of professional consensus around such an idea". Many textbooks still state that the profession accepted static expecations, and Friedman refuted it. If the textbooks are wrong, someone should start writing articles about this. 


> c. realise how destabilising the consequences of inflation
> are in Phillips' model ("the system becomes unstable") in
> comparison to Friedman's (the system returns to
> equilibrium)?

As few as realize that Hayek argued for instability, rather than for a simple return to equilibrium. It might be interesting to see if Phillips ever heard Hayek speak on these matters- I think Hayek and Phillips were both at the LSE at the same time. Or Phillips could have picked instability up from reading Keynes? This may be hard to answer.