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UK Phillips curves and monetary policy

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  • Haldane, Andrew
  • Quah, Danny

Abstract

This paper documents some stylized facts on evolving UK Phillips curves, and shows how these differ from their US versions. We interpret UK Phillips curve dynamics in a positive theory of monetary policy û how policy-maker attitudes on the Phillips curve have evolved since the 1950s û rather than, more traditionally, as interaction between exogenous demand and supply disturbances. Combining this framework with reasoned conjectures on how policy-makers' beliefs have changed helps explain some features of the evolving UK Phillips curve. We suggest that correlations suggesting an extreme favorable unemployment-inflation tradeoff might indicate not something to be exploited but instead only policy-makers' correctly acknowledging that no tradeoff exists.
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  • Haldane, Andrew & Quah, Danny, 1999. "UK Phillips curves and monetary policy," Journal of Monetary Economics, Elsevier, vol. 44(2), pages 259-278, October.
    • Handle: RePEc:eee:moneco:v:44:y:1999:i:2:p:259-278
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    1. Svensson, Lars E. O., 1997. "Inflation forecast targeting: Implementing and monitoring inflation targets," European Economic Review, Elsevier, vol. 41(6), pages 1111-1146, June.
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    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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