Unemployment versus inflation ?:
- London The Institute of economic affairs 1975
- 48p.-
THE INSTITUTE has inaugurated a series of lectures by economists, and also by economic historians and other social scientists, to discuss fundamental aspects of the British economy and develop ments in economic thinking that help to shed light on them.
IEA Lecture No. 1 was delivered in 1973 by Dr Charles Hanson of the University of Newcastle on the British labour market and its development through a century of trade union legislation culmina ting in the 1971 Industrial Relations Act. It was published as Oc casional Paper 38.1
IEA Lecture No. 2 was delivered in 1974 (September) by Pro fessor Milton Friedman of the University of Chicago on a different, but related, aspect of the labour market: the fundamental inter connections between unemployment and inflation. It took the form of an analysis of the developing debate among economists on what has become known as 'the Phillips Curve' devised in 1958 by the late Professor A. W. Phillips (1914-1975) to show the relationship between unemployment and the rate of change of wages over time. Work on preparation of the papers emerging from the IEA seminar on inflation, also in September 1974, to which Professor Friedman contributed notably,2 delayed the processing of his lecture. He re vised an imperfect transcript of the tape-recording in December and generously re-created the drawings of diagrams he had used in the lecture. He also corrected a series of answers to questions, which appear here as the Appendix on "The Trade Unions and Inflation'.
Professor Friedman's revised lecture is published mainly for the interest of economists and students of economics. Although it is composed with his customary verbal skill and felicity, it is concerned with a theorem that will be unfamiliar to readers who have not followed the academic debate on the Phillips Curve but that is germane to the understanding of the relationship between inflation and unemployment. Since the lecture was originally delivered to an audience primarily of economists, Professor Friedman used mathe matical notations and technical terms that are familiar to specialists but that will seem forbidding to non-economists.