The Phillips curve—the relationship between price inflation and fluctuations in economic activity— is a central building block of economic models that allow for nominal rigidities and are relied upon by central banks around the world to gauge cyclical inflationary pressures and forecast inflation. The lack of deflationary pressures during the Great Recession and, more recently, the apparent lack of inflationary pressures during the recovery have brought into the forefront the question of whether this relationship still exists in the data.1 More generally, the fact that inflation appears to have become less responsive to fluctuations in economic activity during the past couple of decades has been documented for the United States by Atkeson and Ohanian (2001), Roberts (2006), Mavroeidis and others (2001), and Blanchard (2016).

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