Chris Hughes on the Legacy of Arthur Burns and its Implications for Macro Policy Today
Macro Musings with David Beckworth
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The Importance of Business Psychology in the History of Inflation
Arthur Burns did not believe in the Phillips curve. He believed that inflation was so destabilizing to the business cycle and to the process of financial decision making, it needed to be nipped in the butt. Inflation went from about 4% in the late 1960s and early 1970s to around 6% by the mid to the late 1970s. But with these two very significant bumps, the first in 1973 and the second in 1979 and 1980, both of which related to geopolitical events,. The Iranian Revolution and the Iran-Iraq War.
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