The paper investigates how the Fed-MIT-Penn model incorporated the Phillips curve within its larger system of equations after Milton Friedman’s Presidential Address (1968). My departure point is James Forder’s history of the Phillips curve (2014) according to which the standard narrative is a myth. Forder examines a wide range of literature, however devoting little attention to the macroeconometric models of the 1960s and 1970s, both because they were “works in progress”, therefore he considers difficult to infer “what [was] generally believed” (2014, 20-21); and because they were short run forecasting models and thus little affected by the debate on the vertical Phillips curve.

The Fed-Mit-Penn model resulted from a collaboration between academic economists and practitioners from the Fed Board (1966-1970) thus combining theoretical purposes with policy analysis and forecasting. Differently from previous macroeconometric models that concentrated on short run fluctuations, the Fed-MIT-Penn model also concentrated on the analysis of the system dynamic from short run fluctuations to a golden age, starting from Solow’s growth model. Its short and long run perspective would make the model builders not indifferent to the academic debate about the tradeoff between inflation and unemployment.

The model deserves a special attention also because it was the model of the Fed Board whose discretionary policy was Friedman’s Presidential Address main target (see Forder 2016). Moreover, the standard narrative considered it representative of the state of art of the late 1960s and 1970s (see Blanchard 2008, Goodfriend and King 1997, Fisher 1987, 1988, Mankiw 1990).