stagflation and the 1970s and international macro

The Lucas critique

Permanently raising inflation in hopes that this would permanently lower unemployment would eventually cause firms' inflation forecasts to rise, altering their employment decisions. In other words, just because high inflation was associated with low unemployment under early 20th century monetary policy does not mean that high inflation should be expected to lead to low unemployment under every alternative monetary policy regime.

With hysteresis, permanently lower inflation translates into permanently higher unemployment.

Rereading Lucas and Sargent 1979 by Simon Wren-Lewis

A commenter points to Krugman's take:

Rudi Dornbusch and the Salvation of International Macroeconomics (Wonkish)

Fallacies of Immaculate Causation

Currencies, Prices, and Mike Mussa (A Bit Wonkish)

Hermetic Economic Cults (Wonkish)

Exchange Rates and Wages

New Frontiers in Economic Barbarism

History Roolz