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Kevin: That Lipsey bit is purely from my memory, as an aside Lipsey gave in a talk about methodology. But James Forder says that Lipsey, R. G. (1978) ‘The place of the Phillips curve in macroeconomic models’, in Stability and inflation eds. A. R. Bergstrom, A. Catt, M. H. Peston, and B. D. J. Silverstone. Chichester: John Wiley & Sons pp. 49-76. is where Lipsey talked about his previous writings on the Phillips curve, so it might be in there.

I remember that lovely quote from Sunny Jim, but I can't remember when he said it. Ah! Google tells me 1976, and that that part of his speech was written by Peter Jay (BBC economics reporter). But would he have said it, if Friedman had taken up engineering instead of economics?

The other quote that comes to mind is Keynes', about monetary policy by the trades unions (ch 17 IIRC, but I've left both my copies of the GT at home).

Nick Rowe,

Peter Jay was one of the voices of monetarism in the UK and a rare example of a left-wing monetarist, so I imagine he wouldn't have said it.

However, it's worth stressing that the key battle of the 1970s (especially in the UK) was not Keynesianism vs. monetarism, but cost-push inflation vs. monetarism.

And it's also worth stressing that in the UK "demand" was usually used to refer to RGDP or unemployment, at least in popular discussions. Even the nominal vs. real interest rate distinction was often overlooked.

W. Peden, let's see if I get this right.

How does MSI ALL apply to a CD from a bank?

Too Much Fed,

It depends on the substitutability of a deposit as against currency-


Current accounts, money-market fund accounts, CDs, commercial paper etc. all have some degree of substituability with currency, but not the same degree and not a constant one over time. So a Divisia-type aggregate and a similar standard aggregate may diverge because of changes in the composition of people's money holdings, e.g. a move from non-interest bearing demand deposits to money market funds or time deposits will have a negative affect on the Divisia index (as in the US in the early 1980s) while a shift from savings and time deposits into M1-type money holdings will have an expansionary effect (as in the US in the early 1990s). In such circumstances, broad money Divisia-indexes often tell a story somewhere in between narrow money and broad money.

William A. Barnett is a good person to read for the details, and I recommend his book "Getting it Wrong".

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