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

Olivier Coibion, Yuriy Gorodnichenko and Mauricio Ulate

AEA Papers and Proceedings, 2019, vol. 109, 465-69

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.

JEL-codes: E24 E31 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pandp.20191055
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Citations: View citations in EconPapers (18)

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