Replication data for: The Possible Unemployment Cost of Average Inflation below a Credible Target
Principal Investigator(s): View help for Principal Investigator(s) Lars E. O. Svensson
Version: View help for Version V1
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| Data-and-programs | 10/12/2019 07:26:PM | ||
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Project Citation:
Svensson, Lars E. O. Replication data for: The Possible Unemployment Cost of Average Inflation below a Credible Target. Nashville, TN: American Economic Association [publisher], 2015. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114071V1
Project Description
Summary:
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If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the target, the long-run Phillips curve becomes nonvertical. During 1997-2011, average inflation expectations in Sweden have been close to the inflation target of 2 percent, whereas average inflation has fallen short of the target by 0.6 percentage points. The estimates reported suggest that the slope of the long-run Phillips curve is about 0.75. Then the average unemployment rate has been about 0.8 percentage points higher than if average inflation had been on target. This is a large unemployment cost of undershooting the inflation target. (JEL D84, E24, E31, E52, E58)
Scope of Project
JEL Classification:
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D84 Expectations; Speculations
E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E31 Price Level; Inflation; Deflation
E52 Monetary Policy
E58 Central Banks and Their Policies
D84 Expectations; Speculations
E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E31 Price Level; Inflation; Deflation
E52 Monetary Policy
E58 Central Banks and Their Policies
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