SOURCE: Federal Reserve Bank of Richmond

Federal Reserve Bank of Richmond

May 08, 2014 15:06 ET

Richmond Fed's Economic Quarterly Discusses the Monetarist-Keynesian Debate and the Phillips Curve, Focusing on Lessons From the Great Inflation

RICHMOND, VA--(Marketwired - May 8, 2014) - Since the early 1950s, debate between economists mainly at the Cowles Commission and economists mainly at the University of Chicago, led by Milton Friedman, has developed along two parallel but integrally interconnected tracks. The Cowles Commission track involves development of a model of the economy organized around a system of stochastic difference equations with research efforts directed toward providing microeconomic foundations for the individual equations. The Friedman macroeconomic-oriented track involves using changes over time in the systematic character of monetary policy and departures from a given policy as surrogates for controlled experiments in an attempt to distinguish between alternative models. In the latest issue of Economic Quarterly, Richmond Fed senior economist Robert L. Hetzel discusses how the Monetarist-Keynesian debate of the 1960s and 1970s illustrates this ongoing dialectic within macroeconomics.

You can find the full text of this article and others in the latest issue of Economic Quarterly on our website.

Also in the Second Quarter 2013 issue:

  • Federal Reserve Interdistrict Settlement by Alexander L. Wolman
  • Too Big to Manage? Two Book Reviews by Edward Simpson Prescott

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For more information, contact the Federal Reserve Bank of Richmond's Research Department--Publications at 800.322.0565 or visit

The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.

Contact Information

  • Contacts:
    John Weinberg
    Director of Research
    Federal Reserve Bank of Richmond

    Amanda Kramer
    Managing Editor
    Federal Reserve Bank of Richmond Economic Quarterly
    Email Contact