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Is The Phillips Curve Alive and Well After All? Inflation Expectations and the Missing Disinflation / Olivier Coibion, Yuriy Gorodnichenko.
- Format:
- Book
- Author/Creator:
- Coibion, Olivier.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w19598.
- NBER working paper series no. w19598
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2013.
- Summary:
- We evaluate possible explanations for the absence of a persistent decline in inflation during the Great Recession and find commonly suggested explanations to be insufficient. We propose a new explanation for this puzzle within the context of a standard Phillips curve. If firms' inflation expectations track those of households, then the missing disinflation can be explained by the rise in their inflation expectations between 2009 and 2011. We present new econometric and survey evidence consistent with firms having similar expectations as households. The rise in household inflation expectations from 2009 to 2011 can be explained by the increase in oil prices over this time period.
- Notes:
- Print version record
- October 2013.
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