EcoFin Research Papers

This paper provides a comprehensive meta-analysis of advances in the New Keynesian Phillips Curve (NKPC) literature, synthesizing theoretical developments, empirical findings, and methodological innovations over the past three decades. Rather than aggregating coefficients mechanically, the study adopts a structured qualitative–quantitative meta-analytic approach to evaluate how inflation dynamics vary across economic regimes, institutional settings, and model specifications. The analysis reveals that apparent instability and flattening of the Phillips Curve largely reflect regime dependence, expectation anchoring, and openness to global cost pressures rather than a breakdown of the underlying NKPC mechanism. Evidence across advanced, emerging, and transition economies indicates that forward-looking inflation behavior strengthens in tranquil macroeconomic environments with credible monetary frameworks, while backward-looking inertia dominates during recessions and in economies with histories of volatile inflation. Hybrid and sticky-information NKPC formulations consistently outperform purely forward-looking specifications in capturing inflation persistence, particularly during periods of heightened uncertainty. Recent methodological contributions, including time-varying, Bayesian, frequency-domain, and machine learning approaches, further demonstrate that the Phillips relationship is nonlinear, state-dependent, and horizon-specific. Overall, the findings suggest that the NKPC remains a valid but conditional framework for understanding inflation dynamics, with its empirical performance critically shaped by expectations regimes, institutional credibility, and global integration.

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