The Phillips curve suggests rising wages from low unemployment may increase inflation temporarily. High inflation may prompt Fed rate hikes, raising borrowing costs and wage demands. Despite ...

Price rigidity is a key mechanism through which monetary policy is thought to affect the economy. When some prices are hard to change, firms may respond to a monetary impetus by changing instead their ...

The well-known Phillips curve suggests that future inflation depends on current and past inflation and a measure of economic slack or resource utilization. Using the unemployment gap to measure slack, ...

In this paper, we undertake empirical analysis to understand U.S. wage behavior since the beginning of the new millennium. At the macroeconomic level, we find that a productivity-augmented Phillips ...

The surprise for 2018 will be how little inflation will rise. Markets are building a house of cards on plans for inflation to return as they bet on a return of the Phillips curve. The anticipated ...