01980cas a2200265 a 4500 AALejournalIMF015591 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513536613 1018-5941 BD-DhAAL BD-DhAAL Blanchard, Olivier. Inflation and Activity : Two Explorations and their Monetary Policy Implications / Olivier Blanchard, Eugenio Cerutti, Lawrence Summers. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (29 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 We explore two issues triggered by the crisis. First, in most advanced countries, output remains far below the pre-recession trend, suggesting hysteresis. Second, while inflation has decreased, it has decreased less than anticipated, suggesting a breakdown of the relation between inflation and activity. To examine the first, we look at 122 recessions over the past 50 years in 23 countries. We find that a high proportion of them have been followed by lower output or even lower growth. To examine the second, we estimate a Phillips curve relation over the past 50 years for 20 countries. We find that the effect of unemployment on inflation, for given expected inflation, decreased until the early 1990s, but has remained roughly stable since then. We draw implications of our findings for monetary policy. Mode of access: Internet Cerutti, Eugenio. Summers, Lawrence. IMF Working Papers; Working Paper ; No. 2015/230 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/230/001.2015.issue-230-en.xml IMF e-Library