Spain over this period. We show that the New Keynesian Phillips curve is shifted by immigration if natives' and immigrants …' labour supply or bargaining power differ. Estimation of the curve for Spain indicates that the fall in unemployment since …The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly …

flatter. We argue that this favorable evolution is largely due to the huge rise in the immigration rate, from 1% of the … population in 1994 to 9.3% in 2006. We derive a New Keynesian Phillips curve accounting for the effects of immigration, a … estimate this curve for Spain since 1980 and find that while the fall in unemployment over the last 8 years comes along with an …