Introduction

It is a privilege to contribute to this volume of the Collected Works of A.W.H. ‘Bill’ Phillips. We both knew Bill as a teacher and later colleague, so we commence our chapter with some personal recollections of our first acquaintances. Then we turn to a consideration of the many ways in which Phillips influenced econometrics, focusing on three main aspects (control theory, moving-average errors in dynamic models, and exogeneity).

Personal recollections

Initial contacts

GEM first became aware of Bill Phillips when he visited the Economists' Bookshop following an interview at the LSE for admission to the undergraduate B.Sc.(Econ) degree course. Having previously studied economics from a single textbook in school, he was overwhelmed by the vast array of economics books, arranged not only alphabetically but by subdiscipline. Looking for an inexpensive and less daunting purchase, he came across a section containing very short pamphlets and published versions of public lectures. From this section, he found a copy of an inaugural lecture entitled ‘Employment, Inflation and Growth’ (chapter 22). The combination of subject matter and price attracted him, and so he was soon reading and learning from Bill Phillips. Topics covered in this lecture included discussion of the role of econometric models in economic policy analysis, emphasis on the value of feedback control mechanisms using proportional, derivative and integral controls in economic analysis, and interpretations and modifications to the Phillips Curve (chapter 25), which was to play an important role in macroeconomics during the 1960s and 1970s.