Phillips curve remains an enigma
The understanding of what underlies the correlation between unemployment and the inflation rate is constantly changing, a new paper from the Richmond Federal Reserve.
The research finds that although a low period of inflation in the 1980s and early 1990s gave rise to a New-Keynesian-Phillips-Curve model based on the assumption of nominal rigidities, there was no agreement on the extent of nominal rigidities in the aggregate economy.
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