Here is a link to my Bloomberg TV segment today on "What'd You Miss" with Scarlett Fu, Alix Steel and Joe Weisenthal: In which I
argue that the Phillips Curve is like the Planet Vulcan. Although observed by eminent astronomers in the early twentieth century: it was never actually there.
The Phillips curve seemed remarkably stable in a century of UK labor market data. But as soon as Phillips published his eponymous article, it vanished. That didn't stop economists from seizing on the Phillips curve as a building block of macro theory to prop up the neoclassical synthesis; Samuelson's attempt to connect Keynesian economics with classical ideas.
Why is this relevant? Because central bankers think that by lowering interest raters even further they will create inflation. This is a bad mistake. We need to raise rates now and support the value of risky assets by trading an ETF in the stock market.
Much more to come in my forthcoming book "Prosperity for All", coming in September from Oxford University Press.