I have had some trouble disagreing with anything written by Paul Krugman. Now I think I have a case. Also it was written in 2007 well into the shrill phase.
In 1958 the New Zealand–born economist A.W. Phillips pointed out that there was a historical correlation between unemployment and inflation, with high inflation associated with low unemployment and vice versa. For a time, economists treated this correlation as if it were a reliable and stable relationship. This led to serious discussion about which point on the “Phillips curve” the government should choose. For example, should the United States accept a higher inflation rate in order to achieve a lower unemployment rate?
In 1967, however, Friedman gave a presidential address to the American Economic Association in which he argued that the correlation between inflation and unemployment, even though it was visible in the data, did not represent a true trade-off, at least not in the long run. “There is,” he said, “always a temporary trade-off between inflation and unemployment; there is no permanent trade-off.” In other words, if policymakers were to try to keep unemployment low through a policy of generating higher inflation, they would achieve only temporary success. According to Friedman, unemployment would eventually rise again, even as inflation remained high. The economy would, in other words, suffer the condition Paul Samuelson would later dub “stagflation.”
The word “economists” is vague. I suppose it is possible to find at least two economists who wrote that, technically justifying the plural. I was not an economist in 1967, so I shouldn’t be too bold, but I did recently note that neither of those economists was named Samuelson or Solow. I am prepared to be convinced that Krugman’s claim is not just techically accurate but a reasonable contribution to the study of the history of thought. But right now I disagree with his claim.