Lael Brainard, a member of the Federal Reserve’s Board of
Governors, delivered a speech in 2017 that included this
observation: “At a time when the unemployment rate has
fallen from 8.2 percent to 4.4 percent, core inflation has
undershot our 2 percent target for 58 straight months. In
other words, the Phillips curve appears to be flatter today
than it was previously.” Briefly explain why the data
Brainard cites indicate that the Phillips curve in 2017 was
relatively flat.
Source: Lael Brainard, “Navigating the Different Signals from Inflation and Unemployment,” Speech delivered at the New York Association for Business Economics, New York, May 30, 2017.