Potential output and inflation dynamics after the Great Recession

被引:0
作者
Yu-Fan Huang
Sui Luo
机构
[1] Capital University of Economics and Business,International School of Economics and Management
来源
Empirical Economics | 2018年 / 55卷
关键词
Trend–cycle decomposition; Phillips curve; Potential output; Inflation dynamics; C22; E31; E32;
D O I
暂无
中图分类号
学科分类号
摘要
Ever since the end of the Great Recession, the US economy has experienced a period of mild inflation, which contradicts with the output–inflation relationship depicted by a traditional Phillips curve. This paper examines how the permanent output loss during the Great Recession has affected the ability of the Phillips curve to explain US inflation dynamics. We find great similarity among several established trend–cycle decomposition methods: potential output declined substantially after the Great Recession. Due to the fact that a lower level of potential output implies a lesser deflationary pressure, we then show that the Phillips curve does predict a period of mild inflation. This finding is largely consistent with the observed data.
引用
收藏
页码:495 / 517
页数:22
相关论文
共 46 条
[1]  
Ball L(2011)Inflation dynamics and the great recession Brook Pap Econ Acti 42 337-405
[2]  
Mazumder S(2012)Estimating the financial crisis impact on potential output Econ Lett 114 113-119
[3]  
Benati L(1981)A new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle J Monet Econ 7 151-174
[4]  
Beveridge S(2012)Do financial crises erode potential output? Evidence from OECD inflation responses Econ Lett 117 700-703
[5]  
Nelson CR(1987)The cyclical component of U.S. economic activity Q J Econ 102 797-814
[6]  
Bijapur M(2015)Is the phillips curve alive and well after all? Inflation expectations and the missing disinflation Am Econ J Macroecon 7 197-232
[7]  
Clark PK(2012)A search and matching approach to labor markets: did the natural rate of unemployment rise? J Econ Perspect 26 3-26
[8]  
Coibion O(2002)A simple and efficient simulation smoother for state space time series analysis Biometrika 89 603-616
[9]  
Gorodnichenko Y(2012)The effect of financial crises on potential output: new empirical evidence from OECD countries J Macroecon 34 822-832
[10]  
Daly MC(2008)Forecasting substantial data revisions in the presence of model uncertainty Econ J 118 1128-1144