Does new Fed research change the odds of a sonft landing?
A recent Bloomberg story raises hope that the
According to the
The Phillips curve captures the empirical inverse relationship between the level of inflation and unemployment. The reciprocal of its slope, sometimes referred to as the "sacrifice ratio," represents the increase in the unemployment rate associated with a 1 percentage point reduction in the inflation rate. In this Chicago Fed Letter, we provide evidence that the Phillips curve has steepened in many industrialized countries since the start of the recovery from the Covid-19 pandemic. This suggests a lower sacrifice ratio now than before 2020.
Chart 1 shows the 12-month CPI inflation rate and the civilian unemployment rate at a monthly frequency from
The inflation-unemployment data from
The data from
The data from
The COVID-19 inflation began in the second quarter of 2020, fueled by supply-chain bottlenecks, massive federal stimulus payments, and aggressive
Data from
If one were to fit a Phillips curve regression model to data using the entire period, as did the authors of the Chicago Fed study, one would find a steep negatively-sloped Phillips curve. The large estimated "sacrifice ratio" suggests that the Fed can lower the inflation rate by engineering modest increases in the unemployment rate. But before making any bets, it would be prudent to consider the instability of the "sacrifice ratio" exhibited over the 2015–2022 sample period. Historically, Fed monetary actions predicated on a stable Phillips curve relationship have rarely worked as planned.
Learn more: How to Pay All of the
The post Does New Fed Research Change the Odds of a
Is California cooperating enough with Congress’ unemployment fraud investigation?
MS Amlin Insurance Selects Sapiens for Transformation of its Commercial Lines Operations across Multiple Countries
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News