Commentary
Recently, U.S. Treasury Secretary Janet Yellen claimed confidently that “we’re not seeing the usual signs of a weakening labor market that would make you fear a recession… so it doesn’t seem at all like it’s requiring higher unemployment…” to bring inflation under control. It gives the impression that she does not believe the Phillips curve effect is out there, not even in the short term. This is somehow a bold assertion against the academic belief over half a century and against the economic projection model adopted by the Federal Reserve.
