Krugman writes at his blog:
One thing I do try is to concede that one piece of the conventional story hasn’t worked that well, namely the Phillips curve, where the “clockwise spirals” of previous protracted large output gaps haven’t materialized.
There is nothing to "materialize," Paul. Austrians have understood this for a very long time/
Murray Rothbard taught us the truth about the Phillips Curve decades ago and Joesph Salerno wrote in 1991:
Keynesian economists posited a stable “Phillips-curve tradeoff ” or
inverse relationship between inflation and unemployment.
Keynesians then advised that policymakers choose from this
“menu of policy choices” the attainable combination of unemployment
and inflation rates which would “optimize” society’s welfare.
During the 1970s and 1980s, however, it became painfully obvious-RW
that the Phillips relationship was not stable, as inflation and unemployment
rates spiralled upward in tandem...
[There is no]room in modern Austrian monetary theory for the
neo-Keynesian postulate of a Phillips curve trade-off between inflation
and unemployment. Such a trade-off can only be alleged if one ignores
the price-coordinating feature of the social appraisement process by
which resource prices are derived from and adapted to entrepreneurial
forecasts of future output prices.