## The Great Recession and the Inflation Puzzle

_IMF Working Papers, May 22, 2013_

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**Canonical URL:** [The Great Recession and the Inflation Puzzle](https://www.imf.org/en/publications/wp/issues/2016/12/31/the-great-recession-and-the-inflation-puzzle-40566)

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## Bibliographic details
- Authors: Troy D Matheson, Emil Stavrev
- Published: May 22, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484334720.001

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### Summary and key findings
- Notwithstanding persistently-high unemployment following the Great Recession, inflation in the United States has been remarkably stable.
- A traditional Phillips curve describes the behavior of inflation reasonably well since the 1960s.
- Using a non-linear Kalman filter that allows for time-varying parameters, the study finds three factors that have contributed to the observed stability of inflation:
  - inflation expectations have become better anchored and to a lower level;
  - the slope of the Phillips curve has flattened; and
  - the importance of import-price inflation has increased.

### Methodology
- Model/framework: Traditional Phillips curve evaluated with time-varying parameters.
- Estimation technique: Non-linear Kalman filter that allows for time-varying parameters.

### Authors and publication specifics
- Authors: Troy D Matheson, Emil Stavrev
- Publication date: May 22, 2013
- Series: Working Paper No. 2013/124
- Issue: 124
- Volume: 2013
- Pages: 12
- DOI: https://doi.org/10.5089/9781484334720.001
- Stock No: WPIEA2013124
- ISBN: 9781484334720
- ISSN: 1018-5941

### Subjects and keywords
- Subjects: Financial crises, Global financial crisis of 2008-2009, Hyperinflation, Import prices, Inflation, Labor, Prices, Unemployment, Unemployment rate
- Keywords: Global financial crisis of 2008-2009, Hyperinflation, Import prices, import-price inflation, Inflation, inflation expectation, inflation in the United States, inflation puzzle, Phillips Curve, Unemployment, Unemployment rate, WP, year-over-year headline CPI inflation

*IMF Working Papers — "The Great Recession and the Inflation Puzzle" by Troy D Matheson and Emil Stavrev, May 22, 2013 (Working Paper No. 2013/124; DOI: https://doi.org/10.5089/9781484334720.001).*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-great-recession-and-the-inflation-puzzle-40566_