IMF authors dismiss global Phillips curve as euro inflation driver

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Eurozone inflation seems to be particularly persistent

Fiercer global competition appears to be a promising explanation for recent low inflation in advanced economies, but it is not to blame in the eurozone, according to recent analysis published by the International Monetary Fund.

The global Phillips curve implies labourers compete not only with their domestic counterparts for jobs but also with those overseas, such that both domestic slack and global capacity matter in the setting of wages and prices.

Authors Yasser Abdih, Li Lin and Anne

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