2010
DOI: 10.1111/j.1468-0335.2009.00807.x
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Stabilization Theory and Policy: 50 Years after the Phillips Curve

Abstract: This paper discusses the impact of A. W. H. Phillips' seminal contributions to stabilization policy on subsequent developments in that field. We review the policy rules introduced by Phillips and show how these relate to the optimal rules emerging from linear–quadratic optimization problems. The consequences of rational expectations for the design of optimal stabilization policy are discussed. These challenges arose from the role of ‘forward-looking’ variables, through issues such as the ‘Lucas Critique’ and t… Show more

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Cited by 18 publications
(11 citation statements)
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“…This fact, among others, justifies the great success of macroeconomic models such as those proposed by A.W. Phillips and his successors (Phillips, 1954(Phillips, , 1957Turnovsky, 2011). It is apparent that these models refer to phenomena that are related to the level of civilization.…”
Section: Introductionmentioning
confidence: 89%
“…This fact, among others, justifies the great success of macroeconomic models such as those proposed by A.W. Phillips and his successors (Phillips, 1954(Phillips, , 1957Turnovsky, 2011). It is apparent that these models refer to phenomena that are related to the level of civilization.…”
Section: Introductionmentioning
confidence: 89%
“…17 Output-stabilizing fiscal policy rules were originally developed by Phillips (1954). Phillips's papers on this subject are discussed in Turnovsky (2011). 18 Poston and Stewart (1978) offers an account of the theory of such catastrophes.…”
Section: The P-sector: Monetary and Fiscal Policymentioning
confidence: 99%
“…Output‐stabilizing fiscal policy rules were originally developed by Phillips (). Phillips's papers on this subject are discussed in Turnovsky ().…”
mentioning
confidence: 99%
“…Hayes argues, however, that Taylor rules ignore MONIAC lessons such as the consequences of controller‐induced instability and the uncertainties that enter into stochastic and robust control methods. (See Turnovsky, 2011 for further analysis of the impact of Phillips's seminal contributions to stabilisation policy and subsequent developments).…”
mentioning
confidence: 99%