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.
Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Commentary
Publication Date: 2008
Issue: FebOrder Number: 1