The Social Consequences of Inflation and Unemployment and Their Remedies

Abstract

In 1979, Galbraith wrote a manuscript titled “The Social Consequences of Inflation and Unemployment and Their Remedies.” The manuscript was found in the John Kenneth Galbraith Personal Papers at the John F. Kennedy Library. The reasons for Galbraith to write the article might appear at first glance to be purely contextual. At the macroeconomic level, the United States was experiencing stagflation, a situation unseen since 1945, resulting in double-digit inflation rates and high unemployment. A policy debate was going on about the Phillips curve and whether there is a trade-off between inflation and unemployment. Milton Friedman challenged the Keynesian analyses of the Phillips curve in the mid-1960s (Friedman, 1977). Galbraith’s 16-page draft manuscript provides us an incisive summary of Galbraith’s views about the causes of stagflation and what can be done about it. He provides us with an alternative to the neoclassical synthesis of Samuelson and Solow and the neoliberal thinking of Milton Friedman and F.A. Hayek.

Citation

Chirat, A., Clerc, B. and Holt, R.P.F. (2024), "The Social Consequences of Inflation and Unemployment and Their Remedies", Fiorito, L., Scheall, S. and Suprinyak, C.E. (Ed.) Research in the History of Economic Thought and Methodology: Including a Symposium on John Kenneth Galbraith: Economic Structures and Policies for the Twenty-first Century (Research in the History of Economic Thought and Methodology, Vol. 41C), Emerald Publishing Limited, Leeds, pp. 93-106. https://doi.org/10.1108/S0743-41542024000041C006