ABSTRACT
This chapter reviews the experiences of the industrialized countries and of fast- and slow-growing developing countries, with the Phillips curve trade-off, supply-side economics, crowding-out effect, and saving, investment and economic growth performances. A more meaningful regression could have been run, or should be tried, if not for the full period covered by Phillips, for part of period, using changes in real wages, employing some measure, even crude, of price inflation. Moreover another regression of employment on wage differentials should have been run using the original Phillips data. Over the 1965-1973 periods, average annual GNP growth rate was 10.4%. These figures completely repudiate any practical value of the Phillips curve analysis and show the futility of any endeavor, particularly for developing or semi-industrialized countries. The Phillips curve trade-off would explain only 17% of change in money wages, while unknown factors would explain 53%.
