The Economics Book

IN CONTEXT

FOCUS

Economic policy

KEY THINKER

Bill Phillips (1914–75)

BEFORE

1936 John Maynard Keynes attempts to explain unemployment and recessions.

1937 British economist John Hicks turns Keynes’s insights into a mathematical model.

AFTER

1968 Milton Friedman argues that the Phillips Curve should account for people’s expectations of inflation, and that there is a “natural” rate of unemployment.

1978 Economists Robert Lucas and Thomas Sargent attack the Phillips Curve.

From 1980s New Keynesian macroeconomics rehabilitates the possibility of stabilizing the macroeconomy (the whole economy).

For 30 years after World War II the world’s more developed economies ...