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Tag Archives: Phillips Curve

What’s Up with the Phillips Curve?

William Chen, Marco Del Negro, Michele Lenza, Giorgio Primiceri, and Andrea Tambalotti U.S. inflation used to rise during economic booms, as businesses charged higher prices to cope with increases in wages and other costs. When the economy cooled and joblessness rose, inflation declined. This pattern changed around 1990. Since then, U.S. inflation has been remarkably stable, even though economic activity and unemployment have continued to fluctuate. For example, during the Great...

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Euro Area Inflation: Why Low For So Long?

By Yasser Abdih, Li Lin, Anne-Charlotte Paret  August 28, 2018 Sculpture of the euro outside the European Central Bank, Frankfurt, Germany: Convergence of core inflation towards the ECB’s medium-term objective is likely to be gradual (photo: Alex Domanski/REUTERS/Newscom) The euro area economy is in its fifth year of recovery, unemployment is close to its pre-crisis level and the output gaps of most countries have closed. Yet, core inflation continues to be low, notwithstanding...

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Serious Flaws in ECB’s Economic Thinking

(Originally published in December 2015) In December 2015, the ECB announced a further „easing“ of monetary policy. In order to stimulate the economy in the euro zone you will take the following measures: First, the ECB will cut its deposit rate from -0.2 per cent to -0.3 per cent. Second, the rate for main refinancing operations will remain unchanged at 0.05 per cent. Third, the ECB will expand its stimulus program by...

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