ECB finds Phillips curve 'insufficient’ to forecast inflation
Bulletin says there is no ‘single best concept’ of the Phillips curve in the eurozone
The Phillips curve provides an "insufficient analytical basis" on which to forecast inflation and set monetary policy, according to the European Central Bank (ECB) in its latest monthly bulletin, published today.
One of the articles contained in the bulletin examines the relationship between inflation and economic slack – the Phillips curve – since the eurozone was established.
While it finds evidence of a "curve-type relationship" between 1999 and 2013 across the eurozone as a whole, the
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