The Modern Phillips Curve Revisited ()
Abstract
The modern Phillips curve is about the
relationship between the average rates of inflation and unemployment. We will
provide additional empirical evidence in the US economy from 1948:01 to 2013:03
that helps demonstrate why such a relationship has been built on a wrong
methodology, as revealed in Ma [1]. An erroneous approach can lead to a misunderstanding of business
cycles and a wrongful implementation of monetary policy. In particular, the way
how the two rates may evolve is now at a critical moment for the Fed to
decide if an exit from its quantitative easing should be initiated.
Share and Cite:
Ma, J. (2014) The Modern Phillips Curve Revisited.
Modern Economy,
5, 188-200. doi:
10.4236/me.2014.53020.
Conflicts of Interest
The authors declare no conflicts of interest.
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