On the other hand, a flatter Phillips curve means that, once inflation shifts outside the range, bringing it back is that much harder, since the output gap or the change in the output gap necessary to raise or lower the inflation rate becomes correspondingly larger.
In his remarks at the recent G-33 Seminar in Bonn, Pablo Guidotti, the Deputy Finance Minister of Argentina, proposed a simple guideline for policymakers in emerging market economies that a number of my colleagues at the Federal Reserve believe is worth considering.