The Phillips Curve: Back to the '60s?

Olivier Blanchard

American Economic Review, 2016, vol. 106, issue 5, 31-34

Abstract: This paper reexamines the behavior of inflation and unemployment and reaches four conclusions: 1) The U.S. Phillips curve is alive and well (at least as well as in the past). 2) Inflation expectations however have become steadily more anchored. 3) The slope of the curve has substantially declined. But the decline dates back to the 1980s rather than to the crisis. 4) The standard error of the residual in the relation is large, especially in comparison to the low level of inflation. Each of the four conclusions presents challenges for the conduct of monetary policy.

JEL-codes: E23 E24 E31 E52 E65 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/aer.p20161003
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Citations: View citations in EconPapers (251)

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