The Great Recession and the Inflation Puzzle
Author | : Mr.Troy Matheson |
Publisher | : International Monetary Fund |
Total Pages | : 12 |
Release | : 2013-05-22 |
ISBN-10 | : 9781484311066 |
ISBN-13 | : 148431106X |
Rating | : 4/5 (66 Downloads) |
Download or read book The Great Recession and the Inflation Puzzle written by Mr.Troy Matheson and published by International Monetary Fund. This book was released on 2013-05-22 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: Notwithstanding persistently-high unemployment following the Great Recession, inflation in the United States has been remarkably stable. We find that a traditional Phillips curve describes the behavior of inflation reasonably well since the 1960s. Using a non-linear Kalman filter that allows for time-varying parameters, we find that three factors have contributed to the observed stability of inflation: inflation expectations have become better anchored and to a lower level; the slope of the Phillips curve has flattened; and the importance of import-price inflation has increased.