Phillips curve still explains eurozone inflation movements – research
Results may become a focal point of debate in the forthcoming ECB strategy review
The Phillips curve remains a valid model to explain the evolution of inflation in the eurozone, says research published by the European Central Bank on January 7.
Economists Laurence Ball at Johns Hopkins University, and Sandeep Mazumder at Wake Forest University in the US claim inflation behaviour in Europe “is not as puzzling or complex as recent discussions suggest”. In fact, “a simple Phillips curve captures most of the movements in inflation over the 20 years that the euro has existed,”
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