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The modern Phillips curve is about therelationship between the average rates of inflation and unemployment. We willprovide additional empirical evidence in the US economy from 1948:01 to 2013:03that helps demonstrate why such a relationship has been built on a wrongmethodology, as revealed in Ma 1. An erroneous approach can lead to a misunderstanding of businesscycles and a wrongful implementation of monetary policy. In particular, the wayhow the two rates may evolve is now at a critical moment for the Fed todecide if an exit from its quantitative easing should be initiated.


Phillips Curve; Business Cycle; Inflation; Unemployment

Cite this paper

Ma, J. 2014 The Modern Phillips Curve Revisited. Modern Economy, 5, 188-200. doi: 10.4236-me.2014.53020.

Author: Jinpeng Ma



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