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The flattening of the Phillips Curve in the US was driven by good factors of concentration

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  • Andrés, Javier
  • Arce, Óscar
  • Burriel, Pablo

Abstract

This paper investigates the relationship between the different drivers of market concentration and the flattening of the Phillips curve. First, we derive the impact of market shares polarization on the slope of the Phillips curve. Next we show that this effect is significantly different depending on the ultimate causes of such market concentration. We find that technology and competition-driven concentration exert a strong flattening effect on the Phillips curve, while changes in entry barriers instead increase the slope. Finally, we find that the pronounced flattening of the U.S. Phillips curve before 2000 would be coherent with the increase in good concentration, while the stability or moderate rise in the slope observed over the first decade of the 2000s could be explained by the increase in bad factors of concentration.

Suggested Citation

  • Andrés, Javier & Arce, Óscar & Burriel, Pablo, 2026. "The flattening of the Phillips Curve in the US was driven by good factors of concentration," European Economic Review, Elsevier, vol. 186(C).
    • Handle: RePEc:eee:eecrev:v:186:y:2026:i:c:s0014292126000413
    DOI: 10.1016/j.euroecorev.2026.105297
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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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