Bils, Mark; Klenow, Peter J.; Malin, Benjamin A. - In: American Economic Review 102 (2012) 6, pp. 2798-2825
Many business cycle models use a flat short-run Phillips curve, due to time-dependent pricing and strategic complementarities, to explain fluctuations in real output. But, in doing so, these models predict unrealistically high persistence and stability of US inflation in recent decades. We...