Doyle, Matthew

WP #06032, September 2006

Recent work on U.S. data calls into question the ability of simple Phillips curve models to forecast inflation. This paper asks whether there is similar evidence of a breakdown in the forecasting ability of Phillips curve models in other OECD countries. The results suggests that the ability of a Phillips curve to out-forecast simpler models has deteriorated in many OECD countries. The evidence is less clear as to whether this breakdown can be attributed to structural breaks in the parameters of the Phillips curve

JEL Classification: E31

Keywords: Phillips curve, structural breaks, forecast breakdown

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