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Is Inflation Just Around the Corner? The Phillips Curve and Global Inflationary Pressures

Year: 2019

Type: article

Abstract: Tightening labor markets in the United States and other advanced economies suggest inflation should be on the rise, yet it remains subdued. Is the Phillips curve broken? We bring together surveys of household or firm expectations for 18 countries to estimate an expectations-augmented Phillips curve. We find strong evidence of a Phillips curve relationship: the Phillips curve is alive and well. The fact that inflation remains well below inflation expectations, both in the United States and abroad, suggests that there remains significant slack in labor markets.

Source: AEA Papers and Proceedings

DOI: 10.1257/pandp.20191055

Authors: Olivier Coibion, Yuriy Gorodnichenko, Mauricio Ulate

Institutions: The University of Texas at Austin, University of California, Berkeley

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W2912109183

FWCI: 8.074

Cites: 5

Cited by: 26

Related to: 10