TY  - UNPD
A1  - Böhl, Gregor
A1  - Lieberknecht, Philipp
T1  - The hockey stick Phillips curve and the zero lower bound
T2  - Working paper series / Institute for Monetary and Financial Stability ; 153
N2  - The recently observed disconnect between inflation and economic activity can be explained by the interplay between the zero lower bound (ZLB) and the costs of external financing. In normal times, credit spreads and the nominal interest rate balance out; factor costs dominate firms' marginal costs. When nominal rates are constrained, larger spreads can more than offset the effect of lower factor costs and induce only moderate inflation responses. The Phillips curve is hence flat at the ZLB, but features a positive slope in normal times and thus a hockey stick shape. Via this mechanism, forward guidance may induce deflationary effects.
T3  - Working paper series / Institute for Monetary and Financial Stability - 153 
KW  - Phillips Curve
KW  - Financial Frictions
KW  - Zero Lower Bound
KW  - Disinflation
KW  - Forward Guidance
Y1  - 2021
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/56450
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-564508
UR  - https://www.imfs-frankfurt.de/fileadmin/user_upload/IMFS_WP/IMFS_WP_153.pdf
IS  - February 17, 2021
EP  - 37
PB  - Johann Wolfgang Goethe-Univ., Inst. for Monetary and Financial Stability
CY  - Frankfurt am Main
ER  -