And in fact, this relationship measurably increases if one adjusts the headline rate of unemployment for those who have become detached from the labour market for a long time, and who are likely to exert only a mild amount of downward pressure on wage and price formation. 3 Robert Gordon documents a similar result for the US.
4 As I mentioned above, there is some evidence that the Phillips curve has steepened in particular in some of the so-called euro area periphery countries, where lawmakers have actively reformed local labour market institutions and deficient demand has promoted a protracted period of wage moderation.