Accessible Version
Monetary Policy in Uncertain Times, Accessible Data
Figure 1
Figure 1a: US Phillips Curve
Density plots of the posterior distributions of the Phillips curve parameter for the US based on MSA-level annual data from 1980 through 2022. The thin black line is the estimate from the model without breaks. The thick red line displays the same information estimated from the breakpoint model. Specifically, to isolate the increased dispersion of the Phillips curve induced by breaks, the break density plot is assigned the same mean as the no break plot and its standard error is computed as the weighted average of the standard errors of the Phillips curve estimates in the two regimes from the breakpoint model.
Note: This figure displays the density plot of the Phillips curve slope in the US from the model that precludes breaks (thick red line). To isolate the increased dispersion of the Phillips curve induced by breaks, the break density plot is assigned the same mean as the no break plot (thin black line) and its standard error is computed as the weighted average of the standard errors of the Phillips curve estimates in the two regimes.
Figure 1b: EU Phillips Curve
Density plot of the posterior distribution of the Phillips curve parameter estimate for the European Union based on the country-level data estimated using Equation (1) but substituting the unemployment rate gap for the unemployment rate. The thin black line is the estimate from the no break model using the full sample of annual data from 1986 through 2021. The thick red line displays the same information estimated from the breakpoint model. To isolate the increased dispersion of the Phillips curve induced by breaks, the break density plot (thick red line) is assigned the same mean as the no break plot (thin black line) and its standard error is computed as the weighted average of the standard errors of the Phillips curve estimates in the two regimes.
Note: This figure displays the density plot of the Phillips curve slope in the European Union from the model that precludes breaks (thick red line). To isolate the increased dispersion of the Phillips curve induced by breaks, the break density plot is assigned the same mean as the no break plot (thin black line) and its standard error is computed as the weighted average of the standard errors of the Phillips curve estimates in the two regimes.