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Non-linéarité de la courbe de Phillips : un survol de la littérature

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  • Renaud St-Cyr

Abstract

The paper reviews evidence from the economic literature on the nature of the relationship between excess capacity and inflation, better known as the Phillips curve. In particular, we examine the linearity of this relationship. This is an important issue in the current economic context in which advanced economies are approaching or exceed their potential output. In fact, several theoretical frameworks in the literature support the existence of non-linearity in the Phillips curve. To that end, we review 35 international studies that empirically analyze the shape of the Phillips curve in advanced economies. Most of the studies reviewed find evidence supporting a convex Phillips curve. This result would imply a stronger relationship between excess capacity and inflation during periods of high economic activity relative to periods of low economic activity.

Suggested Citation

  • Renaud St-Cyr, 2018. "Non-linéarité de la courbe de Phillips : un survol de la littérature," Staff Analytical Notes 2018-3, Bank of Canada.
    • Handle: RePEc:bca:bocsan:18-3
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    2. Donald Coletti, 2023. "A Blueprint for the Fourth Generation of Bank of Canada Projection and Policy Analysis Models," Discussion Papers 2023-23, Bank of Canada.

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    More about this item

    Keywords

    Inflation and prices; International topics;

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • 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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