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Seventy Years of Identifying the Phillips Curve and the Policy Rule

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  • Eric Vansteenberghe

Abstract

Two coefficients enter nearly every quantitative argument about monetary policy: the Phillips-curve slope and the policy rule's response to inflation. For seventy years, each generation that estimated them identified the coefficient conditional on assumptions it maintained, and its successor relaxed one of them, naming the bias this exposed. This survey reconstructs the two programs as a single identification problem. It distinguishes five senses in which a coefficient has been called identified, reads each generation of the curve and of the rule in that key, and shows that the programs fail together because each borrows its identifying condition from the other. The same sequence ran on the latent inflation target and on the optimal rule. The survey closes on what the credible designs license when they leave a range rather than a point: bounds, signs and orderings, and decisions designed for a range.

Suggested Citation

  • Eric Vansteenberghe, 2026. "Seventy Years of Identifying the Phillips Curve and the Policy Rule," Papers 2610.06007, arXiv.org.
  • Handle: RePEc:arx:papers:2610.06007
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