Nonetheless, using different measures of unused capacity to at least hedge against mis-specification risks, we obtain estimates which all indicate that there has been an increased responsiveness of inflation to economic slack in recent years. If I interpret this evidence in a deep parametric way, I tentatively conclude that the slope of the Phillips curve is currently around 0.2.
In this way, we are able to control the growth of the means of payment which is, for the first time since the end of the crisis, below nominal GDP growth, reflecting the prudential bias in our approach. In turn, credit should focus on facilitating consumption and investment decisions by the community.