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dc.contributor.authorKaranassou, Marikaen_US
dc.contributor.authorSala, Héctoren_US
dc.contributor.authorSnower, Dennis J.en_US
dc.description.abstractThe conventional wisdom that inflation and unemployment are unrelated in the long-run implies that these phenomena can be analysed by separate branches of economics. The macro literature tries to explain inflation dynamics and estimates the NAIRU. The labour macro literature tries to explain unemployment dynamics and determine the real economic factors that drive the natural rate of unemployment. We show that the orthodox view that the New Keynesian Phillips curve is vertical in the long-run and that it cannot generate substantial inflation persistence relies on the implausible assumption of a zero interest rate. In the light of these results, we argue that a holistic framework is needed to jointly explain the evolution of inflation and unemployment.en_US
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonn-
dc.relation.ispartofseries|aIZA Discussion paper series |x2265en_US
dc.subject.keywordNew Keynesian Phillips Curve
dc.subject.keywordInflation-unemployment tradeoff
dc.subject.keywordInflation dynamics
dc.subject.keywordUnemployment dynamics
dc.subject.keywordNatural rate of unemployment
dc.titlePhillips curves and unemployment dynamics: A critique and a holistic perspectiveen_US
dc.typeWorking Paperen_US

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