The supply-side origins of U.S. inflation
In recent years, we have not seen much of a negative correlation between inflation, the time series plotted in figure 1, and measures of resource slack, based on real GDP plotted in figure 2. This flattening of the Phillips curve in many countries across the world has startled monetary policymak...
Guardado en:
| Autor principal: | |
|---|---|
| Formato: | Artículo |
| Lenguaje: | English |
| Publicado: |
Banco Central de Chile
2020
|
| Materias: | |
| Acceso en línea: | https://hdl.handle.net/20.500.12580/4884 |
| Etiquetas: |
Agregar Etiqueta
Sin Etiquetas, Sea el primero en etiquetar este registro!
|
| Sumario: | In recent years, we have not seen much of a negative correlation
between inflation, the time series plotted in figure 1, and measures of
resource slack, based on real GDP plotted in figure 2. This flattening
of the Phillips curve in many countries across the world has startled
monetary policymakers. In fact, it has some former policymakers
ask whether the Phillips curve is dead. It is often interpreted as the
disappearance of a short-run output-inflation tradeoff that central
banks can exploit for stabilization purposes.
In this paper I argue that this is too pessimistic an assessment.
What the flattening of the Phillips curve really indicates is that
recent economic fluctuations were not mainly driven by movements in
aggregate demand (AD) but, instead, by joint movements in aggregate
demand and aggregate supply (AS). It is these movements in aggregate
supply that are at the root of the “supply-side origins of inflation” that
I refer to in the title. |
|---|