If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the … target, the long-run Phillips curve becomes non-vertical. During 1997-2011, average inflation expectations in Sweden have … been close to the inflation target of 2 percent, whereas average inflation has fallen short of the target by 0.6 percentage …

extensive case study, we demonstrate how incorporating survey data on inflation expectations can address a number of otherwise …

-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a … breakdown of the relation between inflation and activity. To examine the first, we look at 122 recessions over the past 50 years … unemployment on inflation, for given expected inflation, decreased until the early 1990s, but has remained roughly stable since …

This paper asks whether a textbook Phillips curve can explain the behavior of core inflation in the euro area. A … critical feature of the analysis is that we measure core inflation with the weighted median of industry inflation rates, which … is less volatile than the common measure of inflation excluding food and energy prices. We find that fluctuations in core …

This paper examines the recent behavior of core inflation in the United States. We specify a simple Phillips curve … based on the assumptions that inflation expectations are fully anchored at the Federal Reserve's target, and that labor …-market slack is captured by the level of short-term unemployment. This equation explains inflation behavior since 2000, including …

This paper provides an explanation for the run-up of U.S. inflation in the 1960s and 1970s and the sharp disinflation … by low inflation. However, prolonged episodes of high inflation ending with rapid disinflations can occur when … policymakers underestimate both the natural rate of unemployment and the persistence of inflation in the Phillips curve. I estimate …

This paper examines the effects of expected inflation on the responsiveness of output to nominal disturbances in the … framework of a localized markets model. The mechanism described in the theoretical part of the paper is that expected inflation … sensitivity of real output to these socks. The empirical implication of this proposition -- namely ,that expected inflation …

We explore a hypothesis about the take-off in inflation that occurred in the early 1970s. According to the expectations … trap hypothesis, the Fed was pushed into producing the high inflation out of a fear of violating the public's inflation … expectations. We compare this hypothesis with the Phillips curve hypothesis, according to which the Fed produced the high inflation …

We evaluate possible explanations for the absence of a persistent decline in inflation during the Great Recession and … a standard Phillips curve. If firms' inflation expectations track those of households, then the missing disinflation can … be explained by the rise in their inflation expectations between 2009 and 2011. We present new econometric and survey …