Two records: (1.) This will be long, but I’m heading to divide it into sections to help focus on the main points. So, if you’re not going to all or any bother reading it, please at least skim the section headings. None of the is hidden knowledge or original digging on my part – in truth I think it’s fairly widely known among people that care about this stuff. A lot of this is taken from Leeson and Young’s (2008) “Mythical Expectations”, Robert Gordon’s (2011) “The History of the Phillips Curve: Consensus and Bifurcation”, several articles by James Forder, and some from the principal sources. I’m not heading to cite them formally below because this isn’t a formal write-up.
This is written type of on the take flight. There are a great number of subtle distinctions between these perspectives (prices vs. ‘t get too annoyed with me and I want to know therefore I can modify. 1. Goals augmentation didn’t start with Phelps and Friedman. Expectations have been important to economists for a long time. Malthus, Ricardo, and Bastiat all thoroughly talked about how taking targets about the near future into account often changes leads to static models or models that don’t include targets. With regards to anticipations in macroeconomics, this was not new in the 1960s either. Both really obvious instances are Keynes (1936) and Hayek (1937). Expectations play an enormous role in the General Theory in identifying policy efficiency.
Keynes’s fascination with expectations and perception formation generally go back to his Treatise on Probability, some common passions with Frank Ramsey, etc. This is all very well known, and it was at that time. Much of this was not formalized until later – a point I’ll get back to. In the first formalization of all of the ideas in the 1930s and before of course you start out simple, not formalizing the more difficult ideas perhaps, and then build up. But that is completely different from saying that nobody understood or considered the role of expectations.
- Look in to the company’s guaranteed and delivered reporting time
- If you’d spent just $2,500 in Nam Tai properties, you’ll have gained a $2,625 profit
- 22 See paragraph (d)(2)(ii) of Rule 17a-5
- All locations
This gets much afield of the Phillips Curve (of course there is no Phillips Curve by itself at this time). However, even at the very beginning of focus on the Phillips Curve people known the importance of expectations and valued each other’s insights. So even in these early years expectations were an important part of economics, the germ of later developments came from Phillips himself, and there is no sense that the scientific questions these men were probing were “peripheral”.
What about Samuelson and Solow? 2. The difference between Friedman/Phelps and Samuelson/Solow was a difference of (a.) formalism, and (b.) the natural rate hypothesis. It had been not just a disagreement about if the Phillips Curve existed or whether it was stable. Everyone agreed that it does exist and it had not been necessarily stable. I dunno… read the article? “Aside from the normal caution, these are simply our best guesses we should give another extreme care.
All of our conversation has been phrased in short-run terms, dealing using what might happen in the next few years. It might be wrong, though, to believe that our Figure 2 menu that relates accessible price and unemployment behavior will maintain its same form in the longer run. What we should do in a policy way during the next couple of years may cause it to change in an absolute way.
Thus, it is conceivable that after they had produced a low-pressure economy, the believers in demand-pull might be disappointed in the short run; i.e., prices might continue to rise though unemployment was significant even. But also the opposite is conceivable. A low-pressure economy might build up within itself through the years larger and larger amounts of structural unemployment (the reverse of what happened from 1941 to 1953 as a result of strong war and postwar demands).