The intermittent Phillips curve: Finding a stable (but persistence‐dependent) Phillips curve model specification.
Published In: Economic Inquiry, 2025, v. 63, n. 3. P. 926 1 of 3
Database: Academic Search Ultimate 2 of 3
Authored By: Ashley, Richard; Verbrugge, Randal 3 of 3
Abstract
We make substantial progress on understanding the Phillips curve, yielding important monetary policy implications. Inflation responds differently to persistent versus moderately persistent (or transient) fluctuations in the unemployment gap. This persistence‐dependent relationship aligns with business‐cycle stages, and is consistent with existing theory. Previous work fails to model this dependence, thereby finding the numerous "inflation puzzles"—for example, missing inflation/disinflation—noted in the literature. Our specification eliminates these puzzles; for example, the Phillips curve has not weakened; inflation's post‐2012 slow upward trudge was predictable. The model's coefficients are stable, and it provides accurate out‐of‐sample conditional recursive forecasts through the Great Recession and recovery. [ABSTRACT FROM AUTHOR]
Additional Information
- Source:Economic Inquiry. 2025/07, Vol. 63, Issue 3, p926
- Document Type:Article
- Subject Area:History
- Publication Date:2025
- ISSN:0095-2583
- DOI:10.1111/ecin.13281
- Accession Number:186251376
- Copyright Statement:Copyright of Economic Inquiry is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Looking to go deeper into this topic? Look for more articles on EBSCOhost.