American Economic Review Vol. 104 No. 5 2014
Inflation Persistence, the NAIRU, and the Great Recession
open access
Abstract
The rate of inflation fell far less over the period 2007-2013 than in the period 1979-1985 despite similar large increases in the unemployment rate. This paper asks why. Possible explanations include a change in the persistence of inflation, changes in NAIRU, and other shocks. A change in the persistence of inflation, with inflation more anchored in the period 2007-2013 than in the period 1979-1985, is found to be important. The level and change in the NAIRU cannot be precisely estimated, but the data suggest an increase of nearly 1 percentage point since 2007.
- DOI
- 10.1257/aer.104.5.31
- Volume
- 104
- Issue
- 5
- Pages
- 31-36
- Language
- en
- Sources
- crossref bibtex:phds-export.bib openalex