Discuss the expectations-augmented Phillips curve and the role it plays in models such as the one presented by Barro and Gordon. What do models like this imply for the design of central bank institutions? What influence have they had on international central banks over the past 20 years?

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The Philips curve that is supposed to increase predicted inflation often assumes that if real inflation increases the Phillips curve will grow such that the same real salary increase is supposed at an... View the full answer