IDEAS home Printed from https://ideas.repec.org/a/bfr/rueban/201856.html
   My bibliography  Save this article

Does the Phillips curve still exist?

Author

Listed:
  • Clémence Berson
  • Louis de Charsonville
  • Pavel Diev
  • Violaine Faubert
  • Laurent Ferrara
  • Sophie Guilloux-Nefussi
  • Yannick Kalantzis
  • Antoine Lalliard
  • Julien Matheron
  • Matteo Mogliani

Abstract

Estimates from the Banque de France show that the slope of the Phillips curve in the euro area has remained weak but stable and significantly different from zero since the crisis. In the G7 countries, the coefficient of past inflation has become relatively insignificant since the 1980s,suggesting a shift towards a so-called “non-accelerating” curve. Global demand conditions are captured by import prices, including oil prices. The persistence of a negative output gap and the fall in oil prices largely explain the low level of inflation in the euro area since 2014.However, other factors such as weak wage dynamics or even the risk of an unanchoring of inflation expectations may have played out, the latter risk having called for a strong monetary policy response.

Suggested Citation

  • Clémence Berson & Louis de Charsonville & Pavel Diev & Violaine Faubert & Laurent Ferrara & Sophie Guilloux-Nefussi & Yannick Kalantzis & Antoine Lalliard & Julien Matheron & Matteo Mogliani, 2018. "Does the Phillips curve still exist?," Rue de la Banque, Banque de France, issue 56, february.
  • Handle: RePEc:bfr:rueban:2018:56
    as

    Download full text from publisher

    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/818034_rdb56_en_v4.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Verdugo, Gregory, 2016. "Real wage cyclicality in the Eurozone before and during the Great Recession: Evidence from micro data," European Economic Review, Elsevier, vol. 82(C), pages 46-69.
    2. Petra Marotzke & Robert Anderton & Ana Bairrao & Clémence Berson & Peter Tóth, 2016. "Wage adjustment and employment in Europe," Discussion Papers 2016-19, University of Nottingham, GEP.
    3. Raphael A. Auer & Claudio Borio & Andrew Filardo, 2017. "The Globalisation of Inflation: The Growing Importance of Global Value Chains," CESifo Working Paper Series 6387, CESifo Group Munich.
    4. N. Chatelais & K. Schmidt, 2017. "The impact of import prices on inflation in the euro area," Rue de la Banque, Banque de France, issue 37, january..
    5. Chatelais, N. & De Gaye, A. & Kalantzis, Y., 2015. "Low inflation in the euro area: import prices and domestic slack," Rue de la Banque, Banque de France, issue 06, May..
    6. Elsby, Michael W.L., 2009. "Evaluating the economic significance of downward nominal wage rigidity," Journal of Monetary Economics, Elsevier, vol. 56(2), pages 154-169, March.
    7. Hervé Le Bihan, 2009. "1958-2008, avatars et enjeux de la courbe de Phillips," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(4), pages 81-101.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bfr:rueban:2018:56. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael brassart). General contact details of provider: http://edirc.repec.org/data/bdfgvfr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.