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Courbe de Phillips (Autres papiers à lire (Ball and Mazumder (2011), Kiley…

- - - - Some think that PIB are low and the increase in chô is structural => Fear that the policies (aiming to reduce unemployment) will overheat the economy
      - Other think: low inflation is the result of the success of inflation-targeting
      - 2 Explications
        
        behavior of the labor market. Unemployment is termed "structural" when, in times of recessions, unemployed workers cannot compete for job so they don't have influence on wages
        
        New Keynesian
        Phillips curve, u tilde est le cyclical unemployment
        
        Conclusions préliminaires de l'estimation du modèle pour des pays dvpés
        
        The responsiveness of inflation to unemployment has
        been gradually declining over the past several decades
        
        The relationship between current and past inflation
        has weakened over time
        
        Unemployement gaps have opened in many countries
        
        At the aggregate level, the contribution of global inflation
        to country-specific inflation shows no clear trend.
        
        Autres conclusiosn précédentes
        
        reflect the fact that there are costs
        associated with adjusting nominal prices that lead firms
        to change prices less frequently when inflation is lower
        (Ball, Mankiw, and Romer, 1988).
        
        the flattening of the Phillips curves is
        robust to alternative specifications of the NAIRU
        
        since the mid-1990s, inflation has become better
        anchored around long-term expectations (b/c inflation-targeting and CB independence)
        
        How Much Should We Worry about Inflation?
        
        there seems little risk of strong
        inflation pressure during the ongoing recovery
        
        BUT there is a risk that inflation could become much
        more sensitive to output gaps during future periods of
        expansion
        
        EX Ireland and Spain (Figure 3.9, panels 1
        and 2). Despite large reductions in unemployment
        fueled by inappropriately loose monetary policies,
        inflation did not rise nearly as much as the experience
        of the 1970s would suggest
        
        What if expectitions disanchored ? (as in 1970s)
        
        Then: some believed that inflation could be managed through wage and price control(two complete wage and price freezes under President Richard Nixon) + natural unemployment rate estimated too low+ limited understanding + lack of independence of the FED
        
        mistaken estimates of current economic slack seem
        unlikely today
        
        as long as
        inflation expectations remain firmly anchored, fears
        about high inflation should not prevent monetary
        authorities from pursuing highly accommodative monetary
        policy
        
        moderate
        inflation could induce complacency
        
        2 more items...
        
        inflation risks arising from political
        pressure and limited central bank independence
        
        behavior of the inflation has changed: BC are credible and anticipations anchored + low rate are stickier and less responsive (no wage cut) + firms change their prices less frequently (it's expensive to do so) + globalization may have made inflation more responsive to global demand dvpmt rather than domestic ones
- - - - the std error of residuals in the relation is large
      - Slope of the curve has substantially declined
      - Inflation expectations, however, have become steadily more anchored, leading to a relation between the unemployment rate and the level of inflation (rather than the change in inflation) so we are more in a basic Phillips curve than the one wieth accelerations
      - Low unemployment still pushes inflation up; high unemployment pushes it down
      - l'inflation dépend (pondérément) de la différence entre le taux de chô spot et naturel + moyenne des 4 trim de l'inflation + des anticipations d'inf de LT+ des prix des imports + terme d'erreur
      - inflation now depends mostly on long term expected inflation rather than past inflation
      - Slope of Phillips curve (theta) is constant b/c as the level of inflation has decreased, wages and prices are changed less often, leading to a smaller response of inflation to labor market conditions
      - Results vary slightly, depending on the exact choice of variables and the exact specification
      - Avec le (1-lambda) proche de 0, le trade-off entre chô et inflation est drôlement appétissant car pour combler bcp d'écart de chô on obtient que peu d'inflation
        
        Malgré tout faire attention car c'est vrai pour le moment
        
        Quels seraient les problèmes d'un retour fulgurant de l'inflation?
      - “divine coincidence.”:benchmark New-Keynesian model, stabilizing inflation keeps the unemployment rate at the natural rate, and the natural rate in turn is the “constrained efficient rate”, i.e. the best rate that can be achieved by policy
        
        fails badly empirically: This is reflected by the large standard deviation of the residual in the Phillips curve
        
        residual can be interpreted in two ways
        
        result of misspecification
        
        capturing unobserved movements in the natural rate
        
        Etudier le chô naturel?
- - - - the concurrent relationship between the marginal cost and optimal price depends on the weight (grand theta)
        
        ce theta comprises the demand curve's current and future slope
      - optimal price's responsiveness to marginal costs is determined by trend inflation, 2 parameters of the demand curve and discount rate
      - Bien meilleur en empirique pour expliquer l'aplatissement de la PC
    - - Cadre macro très rigide
      - PC becomes steeper as trend inflation decreases