Journal Article

Explaining apparent changes in the Phillips curve: the Great Moderation and monetary policy

Abstract: Observations that the Phillips curve may be deviating from historical norms are important to policymakers because deviations would imply that more or less output has to be sacrificed to achieve a permanent reduction in long-term inflation. But we argue that recent economic shocks and a shift in the Fed?s response to inflation may be leading economists to misestimate the curve.

Keywords: Phillips curve; Inflation (Finance); Monetary policy;

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2008

Issue: Feb

Order Number: 1