IDEAS home Printed from https://ideas.repec.org/p/mol/ecsdps/esdp22080.html
   My bibliography  Save this paper

The "place of the Phillips curve" in macroeconometric models: The case of the first Federal Reserve Board's model (1966-1980s)

Author

Listed:
  • Rancan, Antonella

Abstract

In the article I examine how model builders from academia and from the Federal Reserve Board confronted the Phillips curve in the construction and subsequent modifications of the Federal Reserve, MIT and University of Pennsylvania macroeconometric model. It is argued that academic debates on Friedman's and Phelps' accelerationist hypothesis, and the evolution of the macroeconomics discipline, did not affect the model building agenda at the Division of Research and Statistics of the Board over the 1970s and 1980s.

Suggested Citation

  • Rancan, Antonella, 2022. "The "place of the Phillips curve" in macroeconometric models: The case of the first Federal Reserve Board's model (1966-1980s)," Economics & Statistics Discussion Papers esdp22080, University of Molise, Department of Economics.
    • Handle: RePEc:mol:ecsdps:esdp22080
    as

    Download full text from publisher

    File URL: http://web.unimol.it/progetti/repec/mol/ecsdps/ESDP22080.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. De Vroey Michel & Duarte Pedro Garcia, 2013. "In search of lost time: the neoclassical synthesis," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 1-31, January.
    2. Aurélien Goutsmedt, 2017. "Stagflation and the crossroad in macroeconomics: the struggle between structural and New Classical macroeconometrics," Documents de travail du Centre d'Economie de la Sorbonne 17043, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Aurélien Goutsmedt & Goulven Rubin, 2018. "Robert J. Gordon and the introduction of the natural rate hypothesis in the Keynesian framework," Post-Print halshs-01821825, HAL.
    4. Orphanides, Athanasios, 2003. "The quest for prosperity without inflation," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 633-663, April.
    5. Aurélien Goutsmedt & Erich Pinzon-Fuchs & Matthieu Renault & Francesco Sergi, 2015. "Criticizing the Lucas Critique: Macroeconometricians' Response to Robert Lucas," Documents de travail du Centre d'Economie de la Sorbonne 15059, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    6. Forder, James, 2010. "Friedman’S Nobel Lecture And The Phillips Curve Myth," Journal of the History of Economic Thought, Cambridge University Press, vol. 32(3), pages 329-348, September.
    7. Nelson Edward, 2005. "The Great Inflation of the Seventies: What Really Happened?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-50, July.
    8. Riccardo DiCecio & Edward Nelson, 2013. "The Great Inflation in the United States and the United Kingdom: Reconciling Policy Decisions and Data Outcomes," NBER Chapters, in: The Great Inflation: The Rebirth of Modern Central Banking, pages 393-438, National Bureau of Economic Research, Inc.
    9. Okun, Arthur M, 1980. "Rational-Expectations-with-Misperceptions as a Theory of the Business Cycle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(4), pages 817-825, November.
    10. Acosta, Juan & Cherrier, Beatrice, 2018. "The transformation of economic analysis at the Federal Reserve during the 1960s," SocArXiv vdy2z, Center for Open Science.
    11. Ellen E. Meade & Daniel L. Thornton, 2012. "The Phillips curve and US monetary policy: what the FOMC transcripts tell us," Oxford Economic Papers, Oxford University Press, vol. 64(2), pages 197-216, April.
    12. Franco Modigliani & Ezio Tarantelli, 1973. "A Generalization of the Phillips Curve for a Developing Country," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(2), pages 203-223.
    13. Robert G. King, 2008. "The Phillips curve and U.S. macroeconomic policy : snapshots, 1958-1996," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 94(Fall), pages 311-359.
    14. N. Gregory Mankiw & Ricardo Reis, 2018. "Friedman's Presidential Address in the Evolution of Macroeconomic Thought," Journal of Economic Perspectives, American Economic Association, vol. 32(1), pages 81-96, Winter.
    15. Christina D. Romer & David H. Romer, 2004. "Choosing the Federal Reserve Chair: Lessons from History," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 129-162, Winter.
    16. Roger Backhouse & Béatrice Cherrier, 2019. "The Ordinary Business of Macroeconometric Modeling: Working on the Fed-MIT-Penn Model, 1964–74," Post-Print halshs-02725159, HAL.
    17. Hetzel,Robert L., 2008. "The Monetary Policy of the Federal Reserve," Cambridge Books, Cambridge University Press, number 9780521881326.
    18. Brayton, Flint & Mauskopf, Eileen, 1985. "The federal reserve board MPS quarterly econometric model of the US economy," Economic Modelling, Elsevier, vol. 2(3), pages 170-292, July.
    19. James L. Pierce & Jared J. Enzler, 1974. "The Effects of External Inflationary Shocks," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 5(1), pages 13-62.
    20. A. J. Tella & Peter A. Tinsley, 1968. "The labor market and potential output of the Federal Reserve-MIT econometric model: a preliminary report," Staff Studies 45, Board of Governors of the Federal Reserve System (U.S.).
    21. Rees, Albert, 1970. "The Phillips Curve as a Menu for Policy Choice," Economica, London School of Economics and Political Science, vol. 37(147), pages 227-238, August.
    22. Franco Modigliani & Lucas Papademos, 1975. "Targets for Monetary Policy in the Coming Year," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 6(1), pages 141-166.
    23. Duo Qin, 2011. "The Phillips Curve from the Perspective of the History of Econometrics," History of Political Economy, Duke University Press, vol. 43(5), pages 283-308, Supplemen.
    24. Anonymous, 1966. "Economic and Social Council," International Organization, Cambridge University Press, vol. 20(3), pages 634-645, July.
    25. Frank De Leeuw & Edward M. Gramlich, 1968. "The Federal Reserve-MIT economic model," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 11-40.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rancan, Antonella, 2021. "The “Place Of The Phillips Curve” in Macroeconometric Models: The Case of the First Federal Reserve Board’s Model (1966-1980s)," OSF Preprints t5jrx, Center for Open Science.
    2. Matthieu Renault, 2018. "Edmond Malinvaud´s Criticisms of the New Classical Economics: Restoring the Nature and the Rationale of the Old Keynesians´ Opposition," Working Papers, Department of Economics 2018_21, University of São Paulo (FEA-USP).
    3. Aurélien Goutsmedt, 2021. "From the Stagflation to the Great Inflation: Explaining the US economy of the 1970s," Revue d'économie politique, Dalloz, vol. 131(3), pages 557-582.
    4. Hendrickson, Joshua R., 2012. "An overhaul of Federal Reserve doctrine: Nominal income and the Great Moderation," Journal of Macroeconomics, Elsevier, vol. 34(2), pages 304-317.
    5. Hendrickson, Joshua, 2010. "An Overhaul of Fed Doctrine: Nominal Income and the Great Moderation," MPRA Paper 20346, University Library of Munich, Germany.
    6. Michael Bordo & Barry Eichengreen, 2013. "Bretton Woods and the Great Inflation," NBER Chapters, in: The Great Inflation: The Rebirth of Modern Central Banking, pages 449-489, National Bureau of Economic Research, Inc.
    7. Goutsmedt, Aurélien & Pinzón-Fuchs, Erich & Sergi, Francesco & Renault, Matthieu, 2019. "Reacting to the Lucas Critique: The Keynesians' Replies," OSF Preprints qxh46, Center for Open Science.
    8. Lucas Papademos, 2005. "Macroeconomic theory and monetary policy: the contributions of Franco Modigliani and the ongoing debate," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 187-214.
    9. Aurélien Goutsmedt, 2016. "The New Classical Explanation of the Stagflation: A Psychological Way of Thinking," Documents de travail du Centre d'Economie de la Sorbonne 16018, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    10. Owen F. Humpage & Sanchita Mukherjee, 2013. "Even keel and the Great Inflation," Working Papers (Old Series) 1315, Federal Reserve Bank of Cleveland.
    11. Aurélien Goutsmedt & Erich Pinzon-Fuchs & Matthieu Renault & Francesco Sergi, 2015. "Criticizing the Lucas Critique: Macroeconometricians' Response to Robert Lucas," Post-Print halshs-01179114, HAL.
    12. Nikolsko-Rzhevskyy, Alex & Papell, David H., 2012. "Taylor rules and the Great Inflation," Journal of Macroeconomics, Elsevier, vol. 34(4), pages 903-918.
    13. Ricardo Reis, 2021. "Losing the inflation anchor," Discussion Papers 2123, Centre for Macroeconomics (CFM).
    14. Frederic S. Mishkin, 2007. "Will Monetary Policy Become More of a Science?," NBER Working Papers 13566, National Bureau of Economic Research, Inc.
    15. Riccardo DiCecio & Edward Nelson, 2013. "The Great Inflation in the United States and the United Kingdom: Reconciling Policy Decisions and Data Outcomes," NBER Chapters, in: The Great Inflation: The Rebirth of Modern Central Banking, pages 393-438, National Bureau of Economic Research, Inc.
    16. Julio J. Rotemberg, 2013. "Shifts in US Federal Reserve Goals and Tactics for Monetary Policy: A Role for Penitence?," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 65-86, Fall.
    17. Suda, Jacek & Zervou, Anastasia S., 2018. "International Great Inflation And Common Monetary Policy," Macroeconomic Dynamics, Cambridge University Press, vol. 22(6), pages 1428-1461, September.
    18. Sharon Kozicki & Peter A. Tinsley, 2005. "Perhaps the FOMC did what it said it did : an alternative interpretation of the Great Inflation," Research Working Paper RWP 05-04, Federal Reserve Bank of Kansas City.
    19. Brayton, Flint & Levin, Andrew & Lyon, Ralph & Williams, John C., 1997. "The evolution of macro models at the Federal Reserve Board," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 47(1), pages 43-81, December.
    20. Charles L. Weise, 2012. "Political Pressures on Monetary Policy during the US Great Inflation," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(2), pages 33-64, April.

    More about this item

    Keywords

    Phillips curve; Natural rate hypothesis; Federal Reserve-MIT-University of Pennsylvania model;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mol:ecsdps:esdp22080. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Claudio Lupi (email available below). General contact details of provider: https://edirc.repec.org/data/dsmolit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.