The Samuelson-Solow Phillips curve and the great inflation

The notion of the Phillips curve as a policy tool was first advanced in 1960 by Paul Samuelson and Robert Solow. Despite their pointing out features of the curve that would later become prominent, (that is, that the curve could shift), it helped create the environment that allowed inflation in the U...

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Bibliographic Details
Published inHistory of economics review no. 55; pp. 62 - 72
Main Authors Hall, Thomas E, Hart, William R
Format Journal Article
LanguageEnglish
Published Hobart Taylor & Francis Group LLC 01.01.2012
Taylor & Francis Ltd
Subjects
Analysis
Consumer Price Index
Econometrics
Economic conditions
Economists
Employment
Estimates
History
Inflation
Inflation (Finance)
International business enterprises
Phillips curve
Presidents
Samuelson, Paul A
Samuelson, Paul A. (Paul Anthony), 1915-2009
Solow, Robert M
Unemployment
United States
Wholesale Price Index-US
Works
United States
United States > US
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Summary:The notion of the Phillips curve as a policy tool was first advanced in 1960 by Paul Samuelson and Robert Solow. Despite their pointing out features of the curve that would later become prominent, (that is, that the curve could shift), it helped create the environment that allowed inflation in the United States to accelerate during the 1960s. Ironically, Samuelson and Solow never estimated their Phillips curve, but instead hand-drew it to fit the data for the twenty-five year period from 1934 to 1958. Using the data and econometric techniques available to them at the time, we estimate the Samuelson-Solow Phillips curve, find that it bears little resemblance to their hand-drawn curve, and discuss the policy implications of the two curves.
Bibliography:History of Economics Review, No. 55, Winter 2012: 62-72
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ISSN:1037-0196
1838-6318