================= HES POSTING ================= In 1952, Milton Friedman raised with A.W.H. Phillips how to model inflationary expectations (Phillips was a PhD student on his way to becoming one of the most perceptive stabilisation theorist of his generation). Phillips wrote down for Friedman on the back of an envelope the adaptive inflationary expectations formula which was later used generally by Phillip Cagan (1956) and Mark Nerlove (1958) and specifically by Friedman and Phelps to undermine the high inflation Phillips curve trade-off. The first Expectations Augmented Phillips curve was provided by Phillips (EJ 1954) in his theoretical Phillips curve essay. Yet the mythology persists that one of the defects in Phillips' curve was the neglect of inflationary expectations. I am curious to hear from others suggestions as to why Phillips was not cited at the time. Certainly at Cambridge for a large part of this century there was a 'common pool' view of knowledge: anyone sordid enough to get possessive about their own individual contribution would probably find their invitations drying up. Chicago was also a dynamic output-orientated place - although the introductory essay of the volume in which Cagan made first use of what he now calls "Phillips' Adaptive Inflationary Formula" was devoted, in part, to finding citations from an interwar Chicago oral tradition that others (especially Don Patinkin) have found to be tenuous. ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]