Macroeconomics and the Phillips Curve Myth

Between Institutions and Global Forces: Norwegian Wage Formation Since Industrialisation

“…In particular, and in the same manner as in international literature surveyed convincingly by Forder (2014) [42], Aukrust listed unemployment well down on the list of wage-determining factors, allocating it some importance when the rate was low and falling, but not when it was moderately high and increasing.…”

“…For the policy makers, it represented a problem for the attainment of important goals, not an instrument towards attainment of those goals. Contrary to the academic Phillips curve myth that emerged between 1975 and 1977, there are almost no evidence of Phillips curve inflationism in Britain, as Forder (2014) [42] shows convincingly.…”

“…Rather, it was a proposition about exogeneity of nominal wages and prices to the level of (un)employment, see Forder (2014) [42] (Chapter 1.3).…”

The Phillips Curve and Oil Prices

“…Charts in Phillips (1958) may be claimed to imply a trade-off between unemployment and inflation. However, perhaps most of the influential research on this idea of a trade-off occurred long after Phillips' paper was published in 1958. Forder (2014 wrote "Phillips (1958) discovered a negative relation between inflation and unemployment; then, either under the influence of Samuelson and Solow (1960) or otherwise, policymakers treated it as offering a selection of inflation-unemployment combinations from which they could choose".…”

“…This paper does not address all aspects of the Phillips curve, which would require many books; Forder (2014) gives many insights. Despite continuing criticism, the Phillips curve-and related ideas, such as the "new Keynesian Phillips curve"-is widely used in theoretical analysis of monetary policy (Mankiw & Reis, 2002, p. 1295.…”