02065cas a2200253 a 4500 AALejournalIMF015044 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498394208 1018-5941 BD-DhAAL BD-DhAAL Ball, Laurence. A Phillips Curve with Anchored Expectations and Short-Term Unemployment / Laurence Ball, Sandeep Mazumder. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the recent behavior of core inflation in the United States. We specify a simple Phillips curve based on the assumptions that inflation expectations are fully anchored at the Federal Reserve's target, and that labor-market slack is captured by the level of shortterm unemployment. This equation explains inflation behavior since 2000, including the failure of high total unemployment since 2008 to reduce inflation greatly. The fit of our equation is especially good when we measure core inflation with the Cleveland Fed's series on weighted median inflation. We also propose a more general Phillips curve in which core inflation depends on short-term unemployment and on expected inflation as measured by the Survey of Professional Forecasters. This specification fits U.S. inflation since 1985, including both the anchored-expectations period of the 2000s and the preceding period when expectations were determined by past levels of inflation. Mode of access: Internet Mazumder, Sandeep. IMF Working Papers; Working Paper ; No. 2015/039 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/039/001.2015.issue-039-en.xml IMF e-Library