Federal Reserve Bank of Boston
Current Policy Perspectives
Sectoral inflation and the Phillips curve: what has changed since the Great Recession?
Using sectoral data at a medium level of aggregation, we find that price changes became less responsive to aggregate unemployment around 2009–2010. The slopes of the disaggregated Phillips curves diminished in many sectors, including housing and some services. We also document a decrease in sectoral inflation persistence, suggesting an increase in the weight of the forward-looking inflation expectation component and a decrease in the weight of the backward-looking component.
Cite this item
Maria Jose Luengo-Prado & Nikhil Rao & Viacheslav Sheremirov, Sectoral inflation and the Phillips curve: what has changed since the Great Recession?, Federal Reserve Bank of Boston, Current Policy Perspectives 17-5, 01 Nov 2017.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
Keywords: disaggregate price indices; inflation persistence; Phillips curve
This item with handle RePEc:fip:fedbcq:2017_005
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