Lee Jackson - Final Thesis - Economics - Stanford University

Table 5.1: Nominal Interest Rate Volatility in the U.K. and the U.S.
U.S., where the Fed expanded the money supply to attempt to reduce unemployment via larger
price increases, an idea supported by the Phillips Curve fallacy.
From 1975 to 1976, the global economy fell into recession, dampening inflation. But
once again, due to the Phillips Curve fallacy, political pressure to devalue the USD increased. In
addition, “Japan bashing” became politically popular in Washington, D.C., as the JPY
appreciated and the island nation logged a chronic trade surplus with the U.S. In 1977, the
administration of incoming President Jimmy Carter advocated for another depreciation of the
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