The Phillips Curve

David Mayes and Matti Virén

Chapter 4 in Asymmetry and Aggregation in the EU, 2011, pp 77-114 from Palgrave Macmillan

Abstract: Abstract The Phillips curve provides the key link between the real economy and inflation and lies at the heart of our analysis. Although there are various asymmetries involved in the relationship the most obvious facet is that the relationship is referred to as a curve. Although in many models it is estimated as a linear relationship in part because of the difficulties that Phillips himself encountered in the original estimation (Phillips, 1958). Indeed it is only partly an accident of history, with the collapse of the long-run regularity and its replacement with a short-run expectations augmented curve (Phelps, 1967), that it has frequently been estimated as a straight line.1

Keywords: Monetary Policy; Euro Area; Rational Expectation; Generalise Little Square; Phillips Curve (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-30464-2_4

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DOI: 10.1057/9780230304642_4

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