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- W3121549487 abstract "This papers begins by highlighting how the presence of a cost channel of monetary policy can offer new insights into the behavior of inflation when the Phillips curve is locally quite flat. For instance, we highlight a key condition whereby lax monetary policy can push the economy in a low inflation trap and we discuss how, under the same condition, standard policy rules for targeting inflation may need to be modified. In the second part of the paper we explore the empirical relevance of the conditions that give rise to these observations using US data. To this end, we present both (i) a wide set of estimates derived from single-equation estimation of the Phillips curve and (ii) estimates based on structural estimation of a full model. The results from both sets of empirical exercises strongly support the key condition we derived." @default.
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- W3121549487 date "2020-01-01" @default.
- W3121549487 modified "2023-09-27" @default.
- W3121549487 title "Monetary Policy when the Phillips Curve is Locally Quite Flat" @default.
- W3121549487 hasPublicationYear "2020" @default.
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