NBER paper proposes ‘resurrecting’ non-linear Phillips curve
Original version of the curve is “strongly non-linear” and helps explain current inflation, authors say
“Resurrecting” the original, non-linear version of the Phillips curve will help understand current inflation, economists Pierpaolo Benigno and Gauti Eggertsson argue in a new paper.
The authors note the original curve, set out in a 1958 paper, was later redeveloped into the linear New Keynesian Phillips curve, “currently the backbone of most macroeconomic models”. In the working paper, published by the National Bureau of Economic Research, they recommend a return to Bill Phillips’ non-linear
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