Phillips curve is convex in short term – NBER paper
Data on US and UK shows firms respond more to positive than negative demand shocks
The Phillips curve is convex in the short term but linear over longer time horizons, according to new research that adds to a growing body of work on non-linearities in the key economic relationship.
How curvy is the Phillips curve?, a working paper published by the US National Bureau of Economic Research (NBER), uses empirical tests and economic modelling to explain this convexity. Several recent papers have presented evidence that the curve, which measures the relationship between inflation and
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