Phillips curves in the euro area

We perform a robust estimation of the Phillips curve in the euro area, extending the existing literature by adding model specifications and taking into account the uncertainty in the measurement of variables and the potential... [ view full abstract ]

We perform a robust estimation of the Phillips curve in the euro area, extending the existing literature by adding model specifications and taking into account the uncertainty in the measurement of variables and the potential structural changes. Using Dynamic Model Averaging, we estimate a battery of 650 models and we identify the most important determinants of inflation over the sample. Using the battery, we forecast inflation and present its probability distribution over the medium term.