Economics, Econometrics and Finance
2 years ago

The Phillips Curve Influence: How Full Employment Policy Shifted in the 1970s

History of Political Economy
How the Phillips Curve Shaped Full Employment Policy in the 1970s: The Debates on the Humphrey-Hawkins Act
Aurélien Goutsmedt

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The Humphrey-Hawkins Act of 1978 aimed to reduce unemployment and inflation rates in the US. Initially focused on helping African Americans and economic planning, it later included targets for both inflation and unemployment. Economists in the Carter administration played a key role in shaping the act, emphasizing the trade-off between inflation and unemployment, citing the Phillips curve. This led to the integration of an inflation target in the bill, supported by business organizations and senators.