The medium-run Phillips curve: A time–frequency investigation for the UK

The debate on the inflation–unemployment relationship has focused almost exclusively on thedistinction between the ‘‘short-run’’ and ‘‘long-run’’ Phillips curves, while virtually ignoringthe ‘‘middle’’ horizons. Using a historical perspective, we show that the UK wage Phillipscurve is essentially a medium-run phenomenon. At the frequency range beyond business cyclefrequencies, that is 8 to 16 years, there is significant evidence of a negative and stablerelationship between money wage inflation and unemployment.