Has the phillips curve flattened?

We contribute to the recent debate on the instability of the slope of the Phillips curve by offering insights from a flexible time-varying instrumental variable approach robust to weak instruments. Our robust approach focuses directly on the Phillips curve and allows general forms of instability, in...

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Bibliographic Details
Main Author: Inoue, Atsushi
Other Authors: Rossi, Barbara ([VerfasserIn]), Wang, Yiru ([VerfasserIn])
Format: eBook
Language:English
Published: London Centre for Economic Policy Research 2024
Series:Discussion paper series / Centre for Economic Policy Research
Subjects:
Online Access:
Collection: CEPR Discussion Papers - Collection details see MPG.ReNa
Description
Summary:We contribute to the recent debate on the instability of the slope of the Phillips curve by offering insights from a flexible time-varying instrumental variable approach robust to weak instruments. Our robust approach focuses directly on the Phillips curve and allows general forms of instability, in contrast to current approaches based either on structural models with time-varying parameters or instrumental variable estimates in ad-hoc sub-samples. We find evidence of a weakening of the slope of the Phillips curve starting around 1980. We also offer novel insights on the Phillips curve during the recent pandemic: The flattening has reverted and the Phillips curve is back.
Physical Description:48 Seiten Illustrationen