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Understanding Inflation and the Implications for Monetary Policy – A Phillips Curve Retrospective - MIT Press Scholarship Online
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Understanding Inflation and the Implications for Monetary Policy: A Phillips Curve Retrospective

Jeff Fuhrer, Yolanda K. Kodrzycki, Jane Sneddon Little, and Giovanni P. Olivei

Abstract

In 1958, economist A. W. Phillips published an article describing what he observed to be the inverse relationship between inflation and unemployment; subsequently, the “Phillips curve” became a central concept in macroeconomic analysis and policymaking. But today’s Phillips curve is not the same as the original one from fifty years ago. The economy, our understanding of price setting behavior, the determinants of inflation, and the role of monetary policy have evolved significantly since then. This book reexamines the theoretical and empirical validity of the Phillips curve in its more recent ... More

Keywords: inverse relationship, inflation, unemployment, Phillips curve, macroeconomic analysis, policymaking, economy, price setting behavior, monetary policy

Bibliographic Information

Print publication date: 2009 Print ISBN-13: 9780262013635
Published to MIT Press Scholarship Online: August 2013 DOI:10.7551/mitpress/9780262013635.001.0001

Authors

Affiliations are at time of print publication.

Jeff Fuhrer, editor

Yolanda K. Kodrzycki, editor

Jane Sneddon Little, editor

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Contents

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Front Matter

Title Pages

Acknowledgments

Foreword

1 The Phillips Curve in Historical Context

The Phillips Curve in Historical Context

Jeff Fuhrer, Yolanda K. Kodrzycki, Jane Sneddon Little, and Giovanni P. Olivei

2 Fifty Years of the Phillips Curve: A Dialog on What We Have Learned

Fifty Years of the Phillips Curve: A Dialog on What We Have Learned

Robert M. Solow, John B. Taylor, and N. Gregory Mankiw

3 Forecasting Inflation

Phillips Curve Inflation Forecasts

James H. Stock, and Mark W. Watson

Comments on “Phillips Curve Inflation Forecasts” by James H. Stock and Mark W. Watson

Adrian Rodney Pagan

Comments on “Phillips Curve Inflation Forecasts” by James H. Stock and Mark W. Watson

Lucrezia Reichlin

4 The Labor Market and the Phillips Curve

A New Method for Estimating Time Variation in the NAIRU

William T. Dickens

Comments on “A New Method for Estimating Time Variation in the NAIRU” by William T. Dickens

Olivier Blanchard

Comments on “A New Method for Estimating Time Variation in the NAIRU” by William T. Dickens

Christopher A. Pissarides

5 Inflation Expectations

Inflation Expectations, Uncertainty, the Phillips Curve, and Monetary Policy

Christopher A. Sims

Comments on “Inflation Expectations, Uncertainty, the Phillips Curve, and Monetary Policy” by Christopher A. Sims

Michael T. Kiley

Comments on “Inflation Expectations, Uncertainty, the Phillips Curve, and Monetary Policy” by Christopher A. Sims

Athanasios Orphanides

6 Evidence on Price Determination

Implications of Microeconomic Price Data for Macroeconomic Models

Bartosz Maćkowiak, and Frank Smets

Comments on “Implications of Microeconomic Price Data for Macroeconomic Models” by Bartosz Macákowiak and Frank Smets

Robert G. King

Comments on “Implications of Microeconomic Price Data for Macroeconomic Models” by Bartosz Macákowiak and Frank Smets

Virgiliu Midrigan

7 Is the Phillips Curve Vertical in the Long Run?

Hysteresis in Unemployment

Laurence Ball

Comments on “Hysteresis in Unemployment” by Laurence Ball

V.V. Chari

Comments on “Hysteresis in Unemployment” by Laurence Ball

Jordi Galí

8 Lessons for Central Bankers: A Panel Discussion

Israeli Monetary Policy and the Phillips Curve

Stanley Fischer

Lessons for Central Bankers from a Phillips Curve Framework

Donald L. Kohn

The Phillips Curve and the European Central Bank

Jürgen Stark

Monetary Policy at the Riksbank and the Phillips Curve

Lars E.O. Svensson

9 The Phillips Curve Going Forward: What We Still Need to Learn

Outstanding Issues in the Analysis of Inflation

William T. Dickens

End Matter

Contributors

Author Index

Subject Index