Understanding the Phillips Curve: How Economic Trends Shape Inflation and Growth

This subsection delves into the derivation and implications of slope coefficients in a log-linearized Phillips curve around stochastic equilibrium. It explores the roles of intertemporal substitution and structural jump errors while addressing econometric challenges such as Euler disturbances and price dispersion. The resulting framework outlines a Vector Autoregressive Moving Average (VARMA) structure, highlighting opportunities for econometric and statistical advancements.