Richmond Fed's "Economic Quarterly" Evaluates How Well a Phillips Curve Accounts for the Changing Nature of Inflation in the United States

The Phillips curve has long been used to represent the tradeoff between inflation and economic activity. However, since the mid-1960s, many theorists have agreed that during periods of persistently high inflation, this model does not hold true. Has the U.S. economy become too complex for this economic model? Richmond Fed economist Andreas Hornstein examines a more contemporary model to determine if it can better reflect the changing nature of inflation in the United States.

You can find the full text of this article and others in the latest issue of "Economic Quarterly" at: http://www.richmondfed.org/publications/economic_research/economic_quarterly/

Also in the Fall 2007 issue:

--  "The Evolution of City Population Density in the United States" by
    Kevin A. Bryan, Brian D. Minton, and Pierre-Daniel G. Sarte

--  "Currency Quality and Changes in the Behavior of Depository
    Institutions" by Hubert P. Janicki, Nashat F. Moin, Andrea L. Waddle, and
    Alexander L. Wolman

--  "Non-Stationarity and Instability in Small Open-Economy Models Even
    When They Are 'Closed'"  by Thomas A. Lubik

The "Economic Quarterly" is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond's Public Affairs office at 804.697.7982.

The Federal Reserve Bank of Richmond is one of 12 District Reserve Banks that together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Richmond Fed serves the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

Contacts: John Weinberg Director of Research Federal Reserve Bank of Richmond 804.697.8205 Kay Haynes Managing Editor Federal Reserve Bank of Richmond Economic Quarterly Email Contact 804-627-1582