Department of Economics
530 Evans Hall #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Berkeley, CA 94709
Institutional Affiliation: University of California at Berkeley
NBER Working Papers and Publications
|January 2019||Is Inflation Just Around the Corner? The Phillips Curve and Global Inflationary Pressures|
with Olivier Coibion, Yuriy Gorodnichenko: w25511
The length of the recovery since the Great Recession and the low reported levels of the unemployment rate in the U.S. are increasingly generating concerns about inflationary pressures. We document that an expectations-augmented Phillips curve can account for inflation not just in the U.S. but across a range of countries, once household or firm-level inflation expectations are used. Given this relationship, we can infer the dynamics of slack from the dynamics of inflation gaps and vice versa. We find that the implied slack was pushing inflation below expectations in the years after the Great Recession but the global and U.S. inflation gaps have shrunk in recent years thus suggesting tighter economic conditions. While we find no evidence that inflation is on the brink of rising, the sustaine...
Published: Olivier Coibion & Yuriy Gorodnichenko & Mauricio Ulate, 2019. "Is Inflation Just Around the Corner? The Phillips Curve and Global Inflationary Pressures," AEA Papers and Proceedings, vol 109, pages 465-469. citation courtesy of
|July 2017||The Cyclical Sensitivity in Estimates of Potential Output|
with Olivier Coibion, Yuriy Gorodnichenko: w23580
The fact that most of the persistent declines in output since the Great Recession have parlayed into equivalent declines in measures of potential output is commonly interpreted as implying that output will not return to previous trends. Using a variety of estimates of potential output for the U.S. and other countries, we show that these estimates respond gradually not only to supply-side shocks but also respond to demand shocks that have only transitory effects on output. Observing a revision in measures of potential output therefore says little about whether concurrent changes in actual output are likely to be permanent or not. In contrast, some structural VAR methodologies can avoid these shortcomings, even in real-time. These approaches point toward a more limited decline in potential o...