Phillips curve
New monetary frameworks involve risk trade-offs – IMF’s Adrian
Lower-for-longer rates may help to avoid deflation, but could contribute to medium-term volatility
The dawn of average inflation targeting
The Fed has failed to explain how it will calculate the ‘average’ for its new AIT framework, raising new risks that central bankers would do well to reflect on
Olli Rehn on AIT, market neutrality and EU fiscal policies
The Bank of Finland governor talks about the ECB’s strategy review, market failure on climate change, lessons from the sovereign debt crisis, and the Draghi legacy effect on Covid-19 responses
Bank of Italy paper looks at flatter Phillips curve
Weaker collective bargaining has played key role in flattening relationship, researchers say
Fed’s new framework splits opinion
Former Fed officials offer mixed reactions to average inflation targeting, with most calling for the US central bank to refine its communication
BIS’s Borio: natural rate puts central banks in ‘straitjacket’
Official urges policy-makers to take “broader view” of the costs and benefits of monetary policy
Supply curves may be convex – ECB paper
Findings imply that Phillips curve is convex and fiscal policy is state-dependent, authors say
Fed feeling its way with new inflation framework
Average inflation targeting is broadly dovish, and could see rates stay lower for even longer
James Bullard on the Fed’s policy review, FSOC and forecasting jobs data
St Louis Fed president discusses his support for average inflation targeting, his concerns about US Treasuries market function, non-bank regulatory weakness and negative rates, as well as the unexpected success in using Homebase data to predict highly…
Growth has replaced slack in Phillips curve relationship – Cleveland Fed paper
Findings could have “substantial disinflationary” implications during current recession, researchers say
Phillips curve flatter when inflation is low – researchers
Downward wage and price rigidities cause non-linearity in Phillips curve, says Peterson Institute paper
Fed set to adopt ‘elements’ of price-level targeting
Covid-19 could act as a catalyst for a Janet Yellen-supported Fed move to adopt elements of price-level targeting. But questions remain about the timing of such a move
ECB research finds Phillips curve still matters
Underlying relations are complicated, but slack and expectations still drive prices, economists say
Flatter Phillips curve calls for average inflation targeting – Brookings paper
Average inflation targeting could be “especially effective” in current environment, researchers say
Phillips curve still explains eurozone inflation movements – research
Results may become a focal point of debate in the forthcoming ECB strategy review
The challenges facing Christine Lagarde
The new ECB president will need to focus on a successful review of the ECB’s monetary and communications policy, while encouraging fiscal stimulus and structural reform
30 years of forecasting: have central banks learned anything?
Forecasting models are constantly being upgraded, but forecast errors are still persistent. What more can central banks do?
Overcoming deflation: Japan’s experience and challenges ahead
Bank of Japan governor Haruhiko Kuroda explains how Japan’s long battle against deflation may offer insights for the future conduct of monetary policy at other central banks
Proposal to axe Phillips curve triggers controversy
“One cannot just ignore an equation,” retorts Olivier Blanchard
Cleveland Fed paper looks for reasons for flatter Phillips curve
Monetary policy responses to “output deviations” may be key factor, researcher argues
RBNZ paper hunts cause of flattening Phillips curve
Paper explores trend of declining relationship between inflation and economic activity
San Francisco Fed researcher seeks to improve Phillips curve
Introducing an “interaction variable” can increase predictive performance, researcher says
FOMC’s normalisation ‘largely successful’, St Louis Fed president says
Fed must “tread carefully” though, as inflation and yield curves offer challenges, Bullard says
Ageing workforce depresses wage inflation – BIS paper
Demographic change could be behind weakness of inflation despite record-low unemployment