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Explaining the Recent Behavior of Inflation and Unemployment in the United States

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  • Mr. Vincent Hogan

Abstract

Low rates of inflation have been recorded in recent years, despite a decline in the unemployment rate. This phenomenon could be the result of a series of transitory shocks or of a permanent change in the structure of the economy leading to a lower NAIRU. The paper suggests that, while the NAIRU may have fallen slightly, it has not fallen by an amount sufficient to explain the recent behavior of inflation. A leading explanation for recent inflation performance appears to be favorable price shocks; in particular, the cost of imports has fallen sharply as the dollar has appreciated.

Suggested Citation

  • Mr. Vincent Hogan, 1998. "Explaining the Recent Behavior of Inflation and Unemployment in the United States," IMF Working Papers 1998/145, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1998/145
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    Citations

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    Cited by:

    1. Chen, Pu & Chihying, Hsiao, 2007. "Learning Causal Relations in Multivariate Time Series Data," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 1, pages 1-43.
    2. Shahbaz, Muhammad & Islam , Faridul & Shabbir, Muhammad Shahbaz, 2012. "Phillips Curve in a Small Open Economy: A Time Series Exploration of North Cyprus," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 35(4), pages 113-130, December.
    3. Ghafar, Aiman & Masih, Mansur, 2017. "The unemployment rate and its determinants: the Malaysian case," MPRA Paper 110220, University Library of Munich, Germany.
    4. Claire Sensoli & Francisco Serranito & Thierry Latreille & Olivier Passet & Odile Chagny & Helene Baudchon & Catherine Mathieu & Christine Rifflart & Hervé Péléraux & Henri Sterdyniak & Paola Veroni, 2000. "Tous ensemble ?: Perspectives 2000-2001 pour l'économie mondiale," Sciences Po publications info:hdl:2441/2781, Sciences Po.
    5. Fumitaka Furuoka & Qaiser Munir & Hanafiah Harvey, 2013. "Does the Phillips curve exist in the Philippines?," Economics Bulletin, AccessEcon, vol. 33(3), pages 2001-2016.
    6. Département analyse et prévision de l'OFCE & Henri Sterdyniak & Hélène Baudchon & Odile Chagny & Thierry Latreille & Catherine Mathieu & Olivier Passet & Christine Rifflart & Claire Sensoli & Paola Ve, 2000. "Tous ensemble ?," Revue de l'OFCE, Programme National Persée, vol. 73(1), pages 7-113.
    7. repec:ebl:ecbull:v:5:y:2007:i:16:p:1-14 is not listed on IDEAS
    8. Steven B. Kamin & Mario Marazzi & John W. Schindler, 2004. "Is China \"exporting deflation\"?," International Finance Discussion Papers 791, Board of Governors of the Federal Reserve System (U.S.).
    9. Masso, Jaan & Staehr, Karsten, 2005. "Inflation dynamics and nominal adjustment in the Baltic States," Research in International Business and Finance, Elsevier, vol. 19(2), pages 281-303, June.
    10. Jonsson, Magnus & Palmqvist, Stefan, 2004. "Do Higher Wages Cause Inflation?," Working Paper Series 159, Sveriges Riksbank (Central Bank of Sweden).
    11. Fumitaka Furuoka, 2007. "Does the “Phillips Curve” Really Exist? New Empirical Evidence from Malaysia," Economics Bulletin, AccessEcon, vol. 5(16), pages 1-14.
    12. Abla A. H. Bokhari, 2020. "The Twinning of Inflation and Unemployment Phenomena in Saudi Arabia: Phillips Curve Perspective," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 14(2), June.
    13. Carbajal-De-Nova, Carolina, 2021. "Wages and inflation in Mexican manufacturing. A two-period comparison: 1994-2003 and 2007-2016," MPRA Paper 109555, University Library of Munich, Germany.
    14. repec:spo:wpecon:info:hdl:2441/2781 is not listed on IDEAS
    15. Richardson Kojo Edeme, 2018. "Providing an Empirical Insight into Nigeria’s Non-acceleration Rate of Unemployment," Journal of Development Policy and Practice, , vol. 3(2), pages 179-190, July.
    16. Steven B. Kamin & Mario Marazzi & John W. Schindler, 2006. "The Impact of Chinese Exports on Global Import Prices," Review of International Economics, Wiley Blackwell, vol. 14(2), pages 179-201, May.
    17. repec:hal:wpspec:info:hdl:2441/2781 is not listed on IDEAS
    18. Fumitaka Furuoka & Chong Mun Ho, 2009. "Phillips curves and openness: New evidence from selected Asian economies," Economics Bulletin, AccessEcon, vol. 29(1), pages 253-264.
    19. Furuoka, Fumitaka, 2009. "Unemployment and Inflation in the Philippines: New Evidence from Vector Error Correction Model," Philippine Journal of Development PJD 2008 Vol. XXXV No. 1-, Philippine Institute for Development Studies.
    20. Gregory D. Hess & Mark E. Schweitzer, 2000. "Does wage inflation cause price inflation?," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Apr.
    21. repec:hal:spmain:info:hdl:2441/2781 is not listed on IDEAS

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