American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Is There a Stable Relationship between Unemployment and Future Inflation?
American Economic Journal: Macroeconomics
vol. 16,
no. 4, October 2024
(pp. 114–42)
Abstract
Evaluating the stability of the Phillips curve using aggregate data is challenging due to the bias that endogenous monetary policy imparts on estimated Phillips curve coefficients. We argue that regional data can be used to identify the structural relationship between unemployment and inflation. Our analysis, using city- and state-level data from 1977 to 2017, is consistent with the notion that both the reduced-form and the structural parameters of the Phillips curve are, to a substantial degree, quite stable.Citation
Fitzgerald, Terry, Callum Jones, Mariano Kulish, and Juan Pablo Nicolini. 2024. "Is There a Stable Relationship between Unemployment and Future Inflation?" American Economic Journal: Macroeconomics, 16 (4): 114–42. DOI: 10.1257/mac.20220273Additional Materials
JEL Classification
- E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E31 Price Level; Inflation; Deflation
- E52 Monetary Policy
- E58 Central Banks and Their Policies
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