ECLECTICS:WHAT DID WE LEARN FROM KEYNES?PART 20

The Stop-go monetary policy of the period,though had since been discontinued was responsible for growing prices even in the face of lowered Federal reserve fund rate and inflation grew to 13.3percent by 1979.Paul Volcker,successor to Arthur Burns at the Fed.jerked it up to 20percent in 1980.Consequently set the stage for the emergence of Reaganomics of the period and there was 25percent personal income tax cut that paved way to the biggest peacetime economic historic expansion.It truly ended the stagflation and inflationary anxiety since the 50s.The relationship between the rate of inflation and the rate of unemployment enjoyed close affinity during the early 50s and 60s and it led to a proposition what they called modified Philips Curve.That by the use of stimulative monetary and fiscal policies,a society could reduce unemployment rate say down to 4percent from 6percent but at the cost of buying a 2percent increase in inflation rate.Although it no longer seem to hold waters,in contrast to the period when it