The academic community also became involved in the dispute and circulated a pamphlet entitled “The Economists versus the Bank of Canada”.11 A W Phillips had just published his famous paper on unemployment and the growth of money wages in the United Kingdom, and shown how higher (wage) inflation was typically associated with lower rates of unemployment.12 Not surprisingly, Phillips’ work found a receptive audience in Canada, and researchers soon replicated his results with North American data.
Much of the commentary in the popular press during this period was also critical of the Bank’s policies, and reflected the widespread view that a little more inflation was not such a bad thing - provided it could bring higher employment and stronger output growth. James Coyne remained unconvinced, however.