[phillips] Correct, connect, and extend the Phillips Curve Tradeoffs lectures

lectures/_static/quant-econ.bib

@@ -2246,7 +2246,7 @@ @article{BarroGordon1983
 
 @article{SargentVelde1995,
   author  = {Sargent, Thomas J. and Velde, Fran\c{c}ois R.},
-  title   = {Macroeconomic Features of the French Revolution},
+  title   = {Macroeconomic Features of the {French Revolution}},
   journal = {Journal of Political Economy},
   volume  = {103},
   number  = {3},
@@ -4310,7 +4310,7 @@ @article{Phelps1967
 
 @article{KingWatson1994,
   author  = {King, Robert G. and Watson, Mark W.},
-  title   = {The Post-War {U.S.} Phillips Curve: A Revisionist Econometric History},
+  title   = {The Post-War {U.S.} {Phillips} Curve: A Revisionist Econometric History},
   journal = {Carnegie-Rochester Conference Series on Public Policy},
   volume  = {41},
   pages   = {157--219},
@@ -4598,7 +4598,7 @@ @book{FudenbergLevine1998
 
 @article{SargentWilliamsZha2006,
   author  = {Sargent, Thomas J. and Williams, Noah and Zha, Tao},
-  title   = {Shocks and Government Beliefs: The Rise and Fall of American Inflation},
+  title   = {Shocks and Government Beliefs: The Rise and Fall of {American} Inflation},
   journal = {American Economic Review},
   volume  = {96},
   number  = {4},
@@ -4618,7 +4618,7 @@ @article{CogleySargent2005
 
 @article{CogleySargent2001,
   author  = {Cogley, Timothy and Sargent, Thomas J.},
-  title   = {Evolving Post-World War {II} {U.S.} Inflation Dynamics},
+  title   = {Evolving Post-{World War II} {U.S.} Inflation Dynamics},
   journal = {NBER Macroeconomics Annual},
   volume  = {16},
   pages   = {331--373},
@@ -4677,7 +4677,7 @@ @article{SimsZha2006
 
 @article{Sims2001comment,
   author  = {Sims, Christopher A.},
-  title   = {Comment on {Sargent} and {Cogley's} `Evolving Post World War {II} {US} Inflation Dynamics'},
+  title   = {Comment on {Sargent} and {Cogley's} `{Evolving Post World War II US Inflation Dynamics}'},
   journal = {NBER Macroeconomics Annual},
   volume  = {16},
   pages   = {373--379},
@@ -4686,7 +4686,7 @@ @article{Sims2001comment
 
 @article{Stock2001comment,
   author  = {Stock, James H.},
-  title   = {Discussion of {Cogley} and {Sargent} `Evolving Post World War {II} {US} Inflation Dynamics'},
+  title   = {Discussion of {Cogley} and {Sargent} `{Evolving Post World War II US Inflation Dynamics}'},
   journal = {NBER Macroeconomics Annual},
   volume  = {16},
   pages   = {379--387},
@@ -4765,7 +4765,7 @@ @incollection{DeLong1997
 
 @incollection{Taylor1997comment,
   author    = {Taylor, John B.},
-  title     = {Comment on `America's Peacetime Inflation: The 1970s'},
+  title     = {Comment on `{America's Peacetime Inflation: The 1970s}'},
   booktitle = {Reducing Inflation: Motivation and Strategy},
   editor    = {Romer, Christina D. and Romer, David H.},
   publisher = {University of Chicago Press},
@@ -4861,7 +4861,7 @@ @article{EllisonYates2007
 
 @article{CarboniEllison2009,
   author  = {Carboni, Giacomo and Ellison, Martin},
-  title   = {The Great Inflation and the {Greenbook}},
+  title   = {The {Great Inflation} and the {Greenbook}},
   journal = {Journal of Monetary Economics},
   volume  = {56},
   number  = {6},
@@ -4919,7 +4919,7 @@ @article{Orphanides2001
 
 @incollection{McLeayTenreyro2019,
   author    = {McLeay, Michael and Tenreyro, Silvana},
-  title     = {Optimal Inflation and the Identification of the Phillips Curve},
+  title     = {Optimal Inflation and the Identification of the {Phillips} Curve},
   booktitle = {NBER Macroeconomics Annual 2018, Volume 33},
   editor    = {Eichenbaum, Martin and Hurst, Erik and Parker, Jonathan A.},
   publisher = {University of Chicago Press},
@@ -6237,3 +6237,196 @@ @article{KuanLiu1995
   number  = {4},
   pages   = {347--364}
 }
+
+@article{Abreu1986,
+  author  = {Abreu, Dilip},
+  title   = {Extremal Equilibria of Oligopolistic Supergames},
+  journal = {Journal of Economic Theory},
+  year    = {1986},
+  volume  = {39},
+  number  = {1},
+  pages   = {191--225}
+}
+
+@article{BackusDriffill1985,
+  author  = {Backus, David and Driffill, John},
+  title   = {Inflation and Reputation},
+  journal = {American Economic Review},
+  year    = {1985},
+  volume  = {75},
+  number  = {3},
+  pages   = {530--538}
+}
+
+@article{Barro1986,
+  author  = {Barro, Robert J.},
+  title   = {Reputation in a Model of Monetary Policy with Incomplete Information},
+  journal = {Journal of Monetary Economics},
+  year    = {1986},
+  volume  = {17},
+  number  = {1},
+  pages   = {3--20}
+}
+
+@article{Ball1995,
+  author  = {Ball, Laurence},
+  title   = {Time-Consistent Policy and Persistent Changes in Inflation},
+  journal = {Journal of Monetary Economics},
+  year    = {1995},
+  volume  = {36},
+  number  = {2},
+  pages   = {329--350}
+}
+
+@article{Brock1972,
+  author  = {Brock, William A.},
+  title   = {On Models of Expectations that Arise from Maximizing Behavior of
+             Economic Agents over Time},
+  journal = {Journal of Economic Theory},
+  year    = {1972},
+  volume  = {5},
+  number  = {3},
+  pages   = {348--376}
+}
+
+@article{EspondaPouzo2016,
+  author  = {Esponda, Ignacio and Pouzo, Demian},
+  title   = {{Berk--Nash} Equilibrium: A Framework for Modeling Agents with
+             Misspecified Models},
+  journal = {Econometrica},
+  year    = {2016},
+  volume  = {84},
+  number  = {3},
+  pages   = {1093--1130}
+}
+
+@article{BenatiSurico2008,
+  author  = {Benati, Luca and Surico, Paolo},
+  title   = {Evolving {U.S.} Monetary Policy and the Decline of Inflation
+             Predictability},
+  journal = {Journal of the European Economic Association},
+  year    = {2008},
+  volume  = {6},
+  number  = {2--3},
+  pages   = {634--646}
+}
+
+@article{CarlstromFuerstPaustian2009,
+  author  = {Carlstrom, Charles T. and Fuerst, Timothy S. and Paustian, Matthias},
+  title   = {Inflation Persistence, Monetary Policy, and the {Great Moderation}},
+  journal = {Journal of Money, Credit and Banking},
+  year    = {2009},
+  volume  = {41},
+  number  = {4},
+  pages   = {767--786}
+}
+
+@misc{Bullard2018,
+  author       = {Bullard, James},
+  title        = {The Case of the Disappearing {Phillips} Curve},
+  howpublished = {Presentation at the ECB Forum on Central Banking, Sintra, Portugal},
+  month        = jun,
+  year         = {2018}
+}
+
+@article{Koopmans1947,
+  author  = {Koopmans, Tjalling C.},
+  title   = {Measurement Without Theory},
+  journal = {Review of Economics and Statistics},
+  year    = {1947},
+  volume  = {29},
+  number  = {3},
+  pages   = {161--172}
+}
+
+@article{DelNegroPrimiceri2015,
+  author  = {Del Negro, Marco and Primiceri, Giorgio E.},
+  title   = {Time Varying Structural Vector Autoregressions and Monetary Policy:
+             A Corrigendum},
+  journal = {Review of Economic Studies},
+  year    = {2015},
+  volume  = {82},
+  number  = {4},
+  pages   = {1342--1345}
+}
+
+@article{AndersonHansenSargent2003,
+  author  = {Anderson, Evan W. and Hansen, Lars Peter and Sargent, Thomas J.},
+  title   = {A Quartet of Semigroups for Model Specification, Robustness, Prices
+             of Risk, and Model Detection},
+  journal = {Journal of the European Economic Association},
+  year    = {2003},
+  volume  = {1},
+  number  = {1},
+  pages   = {68--123}
+}
+
+@article{Hansen1992,
+  author  = {Hansen, Bruce E.},
+  title   = {Testing for Parameter Instability in Linear Models},
+  journal = {Journal of Policy Modeling},
+  year    = {1992},
+  volume  = {14},
+  number  = {4},
+  pages   = {517--533}
+}
+
+@article{KimShephardChib1998,
+  author  = {Kim, Sangjoon and Shephard, Neil and Chib, Siddhartha},
+  title   = {Stochastic Volatility: Likelihood Inference and Comparison with
+             {ARCH} Models},
+  journal = {Review of Economic Studies},
+  year    = {1998},
+  volume  = {65},
+  number  = {3},
+  pages   = {361--393}
+}
+
+@article{Sims1982,
+  author  = {Sims, Christopher A.},
+  title   = {Policy Analysis with Econometric Models},
+  journal = {Brookings Papers on Economic Activity},
+  year    = {1982},
+  volume  = {1982},
+  number  = {1},
+  pages   = {107--164}
+}
+
+@unpublished{Sims1999,
+  author = {Sims, Christopher A.},
+  title  = {Drifts and Breaks in Monetary Policy},
+  note   = {Unpublished manuscript, Department of Economics, Princeton University},
+  year   = {1999}
+}
+
+@misc{Sims2007,
+  author       = {Sims, Christopher A.},
+  title        = {Evidence for Passive Monetary Policy pre-1979},
+  howpublished = {Comments at the Federal Reserve Bank of Cleveland Conference},
+  month        = may,
+  year         = {2007}
+}
+
+@article{PivettaReis2007,
+  author  = {Pivetta, Frederic and Reis, Ricardo},
+  title   = {The Persistence of Inflation in the {United States}},
+  journal = {Journal of Economic Dynamics and Control},
+  year    = {2007},
+  volume  = {31},
+  number  = {4},
+  pages   = {1326--1358}
+}
+
+@phdthesis{Williams2001,
+  author = {Williams, Noah},
+  title  = {Escape Dynamics in Learning Models},
+  school = {University of Chicago},
+  year   = {2001}
+}
+
+@unpublished{SargentWilliamsConquestLost,
+  author = {Sargent, Thomas J. and Williams, Noah},
+  title  = {Conquest Lost and Regained: {American} Inflation in the 2020s},
+  note   = {Extended abstract},
+  year   = {2025}
+}

lectures/_toc.yml

@@ -145,8 +145,10 @@ parts:
   - file: phillips_learning
   - file: phillips_escaping_nash
   - file: phillips_priors
-  - file: phillips_lost_conquest
+  - file: phillips_policy_evaluation
   - file: phillips_drifts_volatilities
+  - file: phillips_drifts_volatilities_2
+  - file: phillips_lost_conquest
 - caption: Optimal Growth
   numbered: true
   chapters:

lectures/kalman.md

@@ -52,6 +52,8 @@ See {doc}`kalman_2` for an economic application in which a firm infers a worker'
 
 See {doc}`kalman_filter_var` for a derivation of the innovations representation and its connection to vector autoregressions.
 
+{doc}`phillips_priors` gives a government that tracks drifting regression coefficients with this filter, and {doc}`phillips_drifts_volatilities` gives an econometrician who does the same for a vector autoregression.
+
 For additional (more advanced) reading on the Kalman filter, see
 
 * {cite}`Ljungqvist2012`, section 2.7

lectures/ls_learning.md

@@ -1434,6 +1434,12 @@ It complements rational learning, studied in {doc}`rational_learning_re`, where
 Bayesian agents learn *within* an equilibrium structure that is already
 specified.
 
+The Phillips curve lectures apply this machinery to a government that learns: a
+scalar case in {doc}`phillips_credibility`, the self-confirming equilibrium as a
+rest point in {doc}`phillips_self_confirming`, constant-gain mean dynamics and
+escapes in {doc}`phillips_learning` and {doc}`phillips_escaping_nash`, and priors
+under which E-stability no longer guarantees convergence in {doc}`phillips_priors`.
+
 ## Exercises
 
 ```{exercise}

lectures/olg_adaptive_money.md

@@ -1230,7 +1230,8 @@ $g = 0$ generates show the slope $-\theta$.
 
 The self-confirming equilibrium is E-stable, so a government that believes its coefficients
 are constant and estimates them by least squares with a decreasing gain is drawn toward it
-({doc}`phillips_self_confirming`, {doc}`phillips_learning`).
+asymptotically ({doc}`phillips_self_confirming`, {doc}`phillips_learning`); in finite samples a
+falling gain can also let an early escape stick, because it slows the return as well.
 
 That is the natural-rate story: the government keeps inflating because its own policy keeps
 producing data that confirm the tradeoff it believes in.