Yes...for a partial reference from Leeson that is available on the web see: http://wwwbusiness.murdoch.edu.au/econs/wps/164.html [I think the core paper is " Patinkin, Johnson and 'The Shadow of Friedman.' in HPE, 2000 but it is not readily available on the web from home.]
This paper by Leeson reminds me of another point: how much the *immediate cause* of the rise of Friedman and his monetarism was linked to the breakdown of the Phillips Curve (Friedman had the good fortune to predict this in his 1968 AEA address the year before it started). In a different way, some post-Keynesians made a related point: that traditional Keynesianism would break down without wage-price controls (but of course their star didn't rise). Paul ^^^^^^ CB: I guess this means some data came or was reinterpreted to contradict the Phillips Curve data and interpretation, but I can see why Friedman wouldn't like the Phillips Curve: Wages up correlated with unemployment down would imply just keep raising wages and soon full employment would be reached, no ? The workers' dream and the capitalists' nightmare. This puts capitalist economists' focus on stopping inflation in a different light. Higher workers' wages doesn't necessarily mean higher prices, if profits are cut. ( See _Value, Price and Profit_ by KM). Profits would be cut through price controls ( without wage controls) "Into the 1970s however, many countries experienced high levels of both inflation and unemployment also known as stagflation." Was this inflation higher wages or mainly higher prices ( or both ?). U.S. wages weren't going up at the time President Ford was handing out "Whip Inflation Now" buttons were they ? ^^^^^ Phillips curve >From Wikipedia, the free encyclopedia In macroeconomics, the Phillips curve (PC) is a supposed inverse relationship between inflation and unemployment. The New Zealand economist Bill Phillips, in his 1958 paper "The relationship between unemployment and the rate of change of money wages in the UK 1861-1957" published in Economica, observed an inverse relationship between money wage changes and unemployment in the British economy over the period examined. Similar patterns were found in other countries and in 1960 Paul Samuelson and Robert Solow took Phillips' work and made explicit the link between inflation and unemployment-when inflation was high, unemployment was low, and vice-versa. As seen to the right, when drawn on a graph with the inflation rate on the vertical axis and the unemployment rate on the horizontal axis, the relationship between the variables showed a downward sloping curve, the Phillips curve (PC). It is little known that the American economist Irving Fisher pointed to this kind of Phillips curve relationship back in the 1920s. On the other hand, Phillips' original curve described the behavior of money wages. So some believe that the PC should be called the "Fisher curve." In the years following his 1958 paper, many economists in the advanced industrial countries believed that Phillips' results showed that there was a permanently stable relationship between inflation and unemployment. One implication of this for government policy was that governments could control unemployment and inflation within a Keynesian policy. They could tolerate a reasonably high rate of inflation as this would lead to lower unemployment - there would be a trade-off between inflation and unemployment. For example, monetary policy and/or fiscal policy (i.e., deficit spending) could be used to stimulate the economy, raising gross domestic product and lowering the unemployment rate, as shown by the change marked A in the diagram. Moving along the Phillips curve, this would lead to a higher inflation rate, the cost of enjoying lower unemployment rates. To a large extent, a leftward movement along the PC describes the path of the U.S. economy during the 1960s, though this move was not a matter of deciding to achieve low unemployment as much as an unplanned side-effect of the Vietnam war. In other countries, the economic boom was more the result of conscious policies Stagflation Into the 1970s however, many countries experienced high levels of both inflation and unemployment also known as stagflation. Theories based on the Phillips curve suggested that this could not happen, and the curve came under concerted attack from a group of economists headed by Milton Friedman-arguing that the demonstrable failure of the relationship demanded a return to non-interventionist, free market policies. The idea that there was a simple, predictable, and persistent relationship between inflation and unemployment was abandoned by most if not all macroeconomists. The main reason behind the failure of the Phillips curve is believed to be that it was a result of a statistical method used by taking data only from the UK and Germany.
