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How can the Phillips curve be used for today's policy?
Simple observation seems to suggest a downward shift of the Phillips curve to low levels of inflation for countries such as the US, Germany, France and Japan. A cloud of inflation-unemployment data points can be read as a family of short run negatively sloped Phillips curves intersecting a vertical long run Phillips curve. How can the evidence on these families of Phillips curves be used for policy? How can it be used to induce higher inflation in today's low inflation context?