UK Philips Curves and Monetary Policy

Andrew Haldane and Danny Quah

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper documents some stylized facts on evolving UK Phillips curves, and shows how these differ from their US versions. We interpret UK Phillips curve dynamics in a positive theory of monetary policy û how policy-maker attitudes on the Phillips curve have evolved since the 1950s û rather than, more traditionally, as interaction between exogenous demand and supply disturbances. Combining this framework with reasoned conjectures on how policy-makers' beliefs have changed helps explain some features of the evolving UK Phillips curve. We suggest that correlations suggesting an extreme favorable unemployment-inflation tradeoff might indicate not something to be exploited but instead only policy-makers' correctly acknowledging that no tradeoff exists.

Keywords: Beliefs; inflation; natural rate; stability (search for similar items in EconPapers)
Date: 2000-02
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Journal Article: UK Phillips curves and monetary policy (1999)
Working Paper: UK Phillips Curves and Monetary Policy (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0444

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