The U.S. Phillips curve: The case for asymmetry

Laxton, Douglas; Rose, David; Tambakis, Demosthenes N.

doi:10.1016/s0165-1889(98)00080-3

Cited by 134 publications

(100 citation statements)

References 20 publications

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“…While a linear Phillips curve warrants a symmetric monetary policy response with respect to business cycle conditions of excess demand or excess supply, a nonlinear Phillips curve may imply preemptive measures are needed to counter inflation when, for example, the unemployment rate declines below the natural rate. Allowing excess demand conditions to persist may necessitate significant subsequent tightening to curtail inflation, adversely affecting not just actual but also potential output (Laxton et al, 1995;Laxton et al, 1999).…”

Section: Introductionmentioning

confidence: 99%

“…Meanwhile, much of the Phillips curve research using regional 1 See for example, Akerlof et al (1996), Clark et al (1996), Laxton et al (1995), Clark and Laxton (1997), Debelle and Laxton (1997), Laxton et al (1999), Tambakis (1999), Turner (1995), Filardo (1998), Schaling (2004), Barnes and Olivei (2003), Huh et al (2009), andFuhrer et al (2012).…”

Section: Introductionmentioning

confidence: 99%

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A closer look at the Phillips curve using state-level data

Kumar

Orrenius

2016

Journal of Macroeconomics

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Studies that estimate the Phillips curve for the U.S. use mainly national-level data and find mixed evidence of nonlinearity, with some recent studies either rejecting nonlinearity or estimating only modest convexity. In addition, most studies do not make a distinction between the relative impacts of short-term vs. long-term unemployment on wage inflation. Using statelevel data from1982 to 2013, we find strong evidence that the wage-price Phillips curve is nonlinear and convex; declines in the unemployment rate below the average unemployment rate exert significantly higher wage pressure than changes in the unemployment rate above the historical average. We also find that the short-term unemployment rate has a strong relationship with both average and median wage growth, while the long-term unemployment rate appears to only influence median wage growth.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

A closer look at the Phillips curve using state-level data

Kumar

Orrenius

2016

Journal of Macroeconomics

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“…1 Most studies on nonlinear Phillips curves for developed economies have focused on the slope of the Phillips curve and the exchange rate pass-through. In the first case, Laxton et al (1999) and Bean (2000) find evidence that the Phillips curve is convex, while Stiglitz (1997) and Eisner (1997) claim that the Phillips curve is concave. 2 The literature on exchange rate pass-through, in turn, reports several sources of nonlinearity, indicating that the degree of pass-through can be related to some macroeconomic variable, including the exchange rate.…”

Section: Introductionmentioning

confidence: 99%

Nonlinear mechanisms of the exchange rate pass-through: a Phillips curve model with threshold for Brazil

Correa¹,

Minella²

2010

Rev. Bras. Econ.

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ContentsThis paper investigates the presence of nonlinear mechanisms of pass-through from the exchange rate to inflation in Brazil. In particular, it estimates a Phillips curve with a threshold for the pass-through. The paper examines whether the short-run magnitude of the pass-through is affected by the business cycle, direction and magnitude of exchange rate changes, and exchange rate volatility. The results indicate that the short-run pass-through is higher when the economy is growing faster, when the exchange rate depreciates above some threshold and when exchange rate volatility is lower. Este trabalho investiga a presença de mecanismos não-lineares de

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“…Pour sa part, Eisner (1997) Ces études ne sont pas les seules sur le sujet, mais elles montrent bien la difficulté d'en arriver à un consensus. Comme le font remarquer Laxton, Rose et Tambakis (1998), une des difficultés inhérentes à ces études vient de ce que les méthodologies utilisées requièrent que soient supposées des formes particulières de non-linéarité; cela réduit considérablement la robustesse des tests. De plus, les études réalisées font pour la plupart l'hypothèse que la non-linéarité, s'il en est, tire sa source de l'effet direct du taux de chômage (ou autre variable de pression de la demande) sur l'inflation.…”

Section: La Non-linéarité De La Courbe De Phillipsunclassified

Les neuf vies de la courbe de Phillips américaine : réincarnations ou résilience ?

Fauvel

Guay

Paquet

2007

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RÉSUMÉ -Au cours des années quatre-vingt-dix, le comportement de l'inflation aux États-Unis a constitué une énigme pour beaucoup d'observateurs; le taux de chômage américain s'est maintenu pendant huit ans sous le seuil de 6 % sans que cela donne lieu à une accélé-ration notable de la croissance des prix et des salaires. À nouveau, la pertinence théorique et empirique de la courbe de Phillips a été contestée. Cet article fait état des explications avancées par les économistes pour élucider cette énigme ainsi que des débats relatifs à une remise en question de la courbe de Phillips. Ce faisant, nous présentons une revue des contributions théoriques et empiriques récentes à la littérature sur la courbe de Phillips.ABSTRACT -In the 90s, the behaviour of US inflation has been a puzzle for many analysts; for eight years, the unemployment rate remained below 6 % without giving rise to a significant acceleration of prices and wages. Once again, both the theoretical and empirical relevance of the Phillips curve has been questioned. This paper reassesses explanations proposed by economists to solve this puzzle, as well as the issues pertaining to the debates about the Phillips curve. Recent theoretical and empirical contributions in the literature on the Phillips curve are also reviewed.

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The U.S. Phillips curve: The case for asymmetry

Cited by 134 publications

References 20 publications

A closer look at the Phillips curve using state-level data

A closer look at the Phillips curve using state-level data

Nonlinear mechanisms of the exchange rate pass-through: a Phillips curve model with threshold for Brazil

Les neuf vies de la courbe de Phillips américaine : réincarnations ou résilience ?

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