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Profile of AW Phillips the person behind Philips Curve and Phillips Curve in India

Summary:
Michael Debabrata Patra, Harendra Behera and Joice John of RBI in this Nov-21 Bulletin article write on the Phillips Curve in India. The article begins by profiling AW Philips, the person behind the Philips Curve. Quite a journey of the New Zealander who was Prisoner of War for three years! The paper then goes on to discuss the several avatars of the Philips Curve. On India’s Philips Curve: The Phillips curve postulates that unemployment can be lowered (output can be increased) but only at the cost of higher wages (inflation) or conversely, wage growth (inflation) can be lowered only at the cost of higher unemployment (lower output). The conduct of monetarypolicy hinges around this exploitable trade-off. Our results indicate that the Phillips curve is alive in India but recovering

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Michael Debabrata Patra, Harendra Behera and Joice John of RBI in this Nov-21 Bulletin article write on the Phillips Curve in India.

The article begins by profiling AW Philips, the person behind the Philips Curve. Quite a journey of the New Zealander who was Prisoner of War for three years! The paper then goes on to discuss the several avatars of the Philips Curve.

On India’s Philips Curve:

The Phillips curve postulates that unemployment can be lowered (output can be increased) but only at the cost of higher wages (inflation) or conversely, wage growth (inflation) can be lowered only at the cost of higher unemployment (lower output). The conduct of monetary
policy hinges around this exploitable trade-off. Our results indicate that the Phillips curve is alive in India but recovering from a period of flattening over the past 6 years. The Phillips curve is convex, flattening with low and negative output gaps and steepening when the output
gap is positive and high.

Amol Agrawal
I am currently pursuing my PhD in economics. I have work-ex of nearly 10 years with most of those years spent figuring economic research in Mumbai’s financial sector.

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