The Early Reception of the Phillips Curve in the United Kingdom: New Evidence from the Papers of the Council on Prices, Productivity, and Incomes

Abstract

Abstract As shown in a 2018 article by Cristiano and Paesani, the element of Phillips's 1958 article that immediately obtained attention in the policy debate was the estimate of the unemployment rate compatible with price stability. Building on this previous work and based on the unpublished papers of the Council on Prices, Productivity, and Incomes and other published sources, the present article throws fresh light on why the curve paper failed to influence policymaking. At least two reasons may account for this. First, by the late 1950s and early 1960s, works based on inferential statistics still failed to obtain widespread attention among professional economists in the United Kingdom. Second, Phillips's 1958 article came at the beginning of a process that led to the abandonment, for some time at least, of the idea of buying price stability at the cost of increasing the unemployment rate.