On the fragility of the nonlinear Phillips curve interpretation of recent inflation
The inflationary episode from 2021 to 2023 reignited the debate on the nonlinearity of the Phillips curve. Aggregate and city-level data indicate a non-linear relationship, with inflation accelerating rapidly when the vacancy-unemployment ratio exceeds one. This column argues that the evidence for a non-linear Phillips curve is fragile and depends on the model specification and […]