Rethinking the Phillips Curve: A Study of Recent Inflation Dynamics in the G-7

Thesis advisor: Robert MurphyA study of recent inflation dynamics in the G-7, this paper discusses a problem with the Phillips curve which arose during the Great Recession (2008-2011). We find that work with time-varying slope, expectation anchoring, and core inflation can correct for the under-predictions that develop in the Phillips Curve during the recession, improving its accuracy throughout the G-7.Thesis (BA) — Boston College, 2012.Submitted to: Boston College. College of Arts and Sciences.Discipline: Economics Honors Program.Discipline: Economics