Benigno, Pierpaolo; Eggertsson, Gauti (2023). It’s Baaack: The Surge in Inflation in the 2020s and the Return of the Non-Linear Phillips Curve (NBER working paper series 31197).
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This paper proposes a non-linear New Keynesian Phillips curve (Inv-L NK Phillips Curve) to ex-plain the surge of inflation in the 2020s. Economic slack is measured as firms’ job vacancies over the number of unemployed workers. After showing empirical evidence of statistically significant non-linearities, we propose a New Keynesian model with search and matching frictions, complemented by a form of wage rigidity, in the spirit of Phillips (1958), that generates strong nonlinearities. Policy implications include the thesis that appropriate monetary policy can bring inflation down without a significant recession and that the recent inflationary surge was mostly generated by a “labor shortage” – i.e. an exceptionally tight labor market.
Item Type: |
Working Paper |
|---|---|
Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Benigno, Pierpaolo |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
NBER working paper series |
Language: |
English |
Submitter: |
Julia Alexandra Schlosser |
Date Deposited: |
31 Oct 2023 08:45 |
Last Modified: |
31 Oct 2023 08:45 |
BORIS DOI: |
10.48350/188357 |
URI: |
https://boris.unibe.ch/id/eprint/188357 |
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