Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We estimate the U.S. New Keynesian Phillips Curve in the time-frequency domain with continuous wavelet tools to provide integrated answers to three controversial issues. (1) Has the short-run tradeoff been stable? (2) What has been the role of expectations? (3) Is there a long-run tradeoff? First, we find that the short-run tradeoff is limited to some specific episodes and that there is no evidence of nonlinearities or structural breaks. Second, households’ expectations captured trend inflation until the Great Recession, but not since 2008. Finally, there is no significant long-run tradeoff. In the long-run, expectations explain inflation.