Can the Phillips curve provide answers to current high inflation rates

IF 1.2 Q3 ECONOMICS Research in Economics Pub Date : 2024-04-16 DOI:10.1016/j.rie.2024.100956

Hany Guirguis , Kelly Cwik , Joseph DeMauro , Michael Suen

引用次数: 0

Abstract

Motivated by the weak response of the inflation rate to the tight labor market, the Federal Reserve (Fed) Bank stepped away from its longstanding preemptive policy to fight inflation as the economy approached full employment. This paper aims to reevaluate the relationships of four measures of inflation with the unemployment rate. We accomplish this task by allowing the Phillips curve (PC) slope to vary over time and depend on the magnitude of the unemployment gap. Assessed by both PC convex specification assessment and the Markov chain Monte Carlo (MCMC) estimation method, we confirm the convexity of the PC when the unemployment gap is negative. In addition, we show that the slope of the PC more than doubled when we allow the coefficient on the economic slack to vary over time. Thus, our study shows that PC is still a relevant tool for guiding monetary policy.

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菲利普斯曲线能否为当前的高通胀率提供答案

由于通货膨胀率对紧缩的劳动力市场反应微弱，联邦储备银行（Fed）在经济接近充分就业时放弃了其长期以来采取的先发制人的政策，转而打击通货膨胀。本文旨在重新评估通胀率与失业率的四种衡量指标之间的关系。为了完成这一任务，我们允许菲利普斯曲线（PC）的斜率随时间变化并取决于失业缺口的大小。通过 PC 凸性规格评估和马尔科夫链蒙特卡罗（MCMC）估计方法，我们证实了当失业缺口为负值时 PC 的凸性。此外，我们还发现，当我们允许经济松弛系数随时间变化时，PC 的斜率增加了一倍多。因此，我们的研究表明 PC 仍是指导货币政策的相关工具。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Research in Economics ECONOMICS-

CiteScore

1.40

自引率

0.00%

发文量

审稿时长

89 days

期刊介绍： Established in 1947, Research in Economics is one of the oldest general-interest economics journals in the world and the main one among those based in Italy. The purpose of the journal is to select original theoretical and empirical articles that will have high impact on the debate in the social sciences; since 1947, it has published important research contributions on a wide range of topics. A summary of our editorial policy is this: the editors make a preliminary assessment of whether the results of a paper, if correct, are worth publishing. If so one of the associate editors reviews the paper: from the reviewer we expect to learn if the paper is understandable and coherent and - within reasonable bounds - the results are correct. We believe that long lags in publication and multiple demands for revision simply slow scientific progress. Our goal is to provide you a definitive answer within one month of submission. We give the editors one week to judge the overall contribution and if acceptable send your paper to an associate editor. We expect the associate editor to provide a more detailed evaluation within three weeks so that the editors can make a final decision before the month expires. In the (rare) case of a revision we allow four months and in the case of conditional acceptance we allow two months to submit the final version. In both cases we expect a cover letter explaining how you met the requirements. For conditional acceptance the editors will verify that the requirements were met. In the case of revision the original associate editor will do so. If the revision cannot be at least conditionally accepted it is rejected: there is no second revision.