Suppose the Phillips curve becomes steeper: a given change in output has a larger effect on inflation.

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Suppose the Phillips curve becomes steeper: a given change in output has a larger effect on inflation. How does this affect the time-consistency problem facing the central bank and the likelihood of high inflation?

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Money Banking and Financial Markets

ISBN: 978-1429244091

2nd edition

Authors: Laurence M. Ball

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Question Posted: Dec 05, 2015 03:47 AM

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Suppose the Phillips curve becomes steeper: a given change in output has a larger effect on inflation.

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Money Banking and Financial Markets

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