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• W2145655554 abstract "It is standard to model the output–inflation trade-off as a linear relationship with a time-invariant slope. We assess empirical evidence for two sets of theories that allow for endogenous variation in the slope of the short-run Phillips curve. At an empirical level, we examine why large negative output gaps in Japan in the late 1990s did not lead to accelerating deflation but instead coincided with stable, albeit moderately negative inflation. Our results suggest that this episode is most convincingly interpreted as reflecting a gradual flattening of the Phillips curve. We find that this flattening is best explained by models with endogenous price durations. These models imply that in any economy where trend inflation is substantially lower (or substantially higher) today than in past decades, time variation in the slope of the Phillips curve has become too important to ignore." @default.
• W2145655554 created "2016-06-24" @default.
• W2145655554 creator A5071142022 @default.
• W2145655554 date "2009-09-01" @default.
• W2145655554 modified "2023-09-27" @default.
• W2145655554 title "What Makes the Output-Inflation Trade-Off Change? The Absence of Accelerating Deflation in Japan" @default.
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• W2145655554 doi "https://doi.org/10.1111/j.1538-4616.2009.00249.x" @default.
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