References Beechey, Meredith J., Benjamin K. Johannsen, and Andrew T. Levin (2007), “Are Long-Run Inflation Expectations Anchored More Firmly in the Euro Area than in the United States?”, Board of Governors of the Federal Reserve System, Finance and Economics Discussion Series, 2008-23. Benati, Luca (2008), “Investigating Inflation Persistence Across Monetary Regimes”, Quarterly Journal of Economics, 123:3, August 2008, 1005-1060.
First, measuring economic slack is fraught with well-known difficulties. Second, both theory and empirical studies suggest that the wage-inflation pass-through varies over time and depends on many factors. Arguably, the structural changes under way in advanced economies imply that the pass-through may be on the decline.