The Monetarist-Keynesian Debate and the Phillips Curve: Lessons from the Great Inflation

FRB Economic Quarterly, Vol. 99, No. 2, Second Quarter 2013, pp. 83-116

Federal Reserve Bank of Richmond Research Paper

34 Pages Posted: 29 May 2014

See all articles by Robert L. Hetzel

Robert L. Hetzel

Federal Reserve Banks - Federal Reserve Bank of Richmond

Date Written: 2013

Abstract

Since the early 1950s, debate between economists of the Cowles Commission and Milton Friedman macroeconomics has developed along two parallel but integrally interconnected tracks. The Cowles Commission track involves development of a model of the economy organized around a system of stochastic difference equations with research efforts directed toward providing microeconomic foundations for the individual equations. The Friedman track involves using changes over time in the systematic character of monetary policy and departures from a given policy as surrogates for controlled experiments in an attempt to distinguish between alternative models. The Monetarist-Keynesian debate of the 1960s and 1970s illustrates this ongoing dialectic within macroeconomics.

Suggested Citation

Hetzel, Robert L., The Monetarist-Keynesian Debate and the Phillips Curve: Lessons from the Great Inflation (2013). FRB Economic Quarterly, Vol. 99, No. 2, Second Quarter 2013, pp. 83-116, Federal Reserve Bank of Richmond Research Paper, Available at SSRN: https://ssrn.com/abstract=2442995

Robert L. Hetzel (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

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