June 2024

The Slope of the Phillips Curve

Francesco Furlanetto and Antoine Lepetit


We review recent developments in the estimation and identification of the Phillips curve and its slope. We have three main objectives. First, we describe the econometric challenges faced by traditional approaches of estimating the Phillips curve, explain how new approaches address those challenges, and assess which limitations still remain. Second, we review the findings of those new approaches and examine the evidence regarding a potential flattening of the Phillips curve in the pre-pandemic period. Third, we provide an account of inflation dynamics in the post-pandemic period with a particular emphasis on the role of nonlinearities.

Keywords: Inflation dynamics, Phillips curve flattening, Phillips curve nonlinearities, Phillips curve slope

DOI: https://doi.org/10.17016/FEDS.2024.043

PDF: Full Paper

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Last Update: June 14, 2024