heavily influenced by the inflation experience in one ’ s own lifetime, which implies that decades of too low inflation can become embedded in expectations. indeed, we have seen some worrying signs of a deterioration of measures of longer - run inflation expectations in recent years, as seen in table 2. importantly, this sustained undershoot of the inflation target is likely to be a recurring dilemma for the fed and central banks in japan and europe that have had similar experiences over the past decade. this problem of inflation running chronically below the target stems in part from the limited ability of central banks to offset economic downturns due to the lower bound on interest rates in a low - neutral - rate environment. 7 implications for the monetary policy framework the risk of the inflation expectations anchor slipping toward shore calls for a reassessment of the dominant inflation targeting framework. 8 a number of alternative frameworks and strategies have been proposed that hold the promise of better achieving the inflation goal and holding fast the inflation anchor. 9 in this regard, i am very pleased that the federal reserve is undertaking a review of our policy framework this year, a topic that federal reserve vice chairman clarida will discuss in his lunch remarks today. in summary, the phillips curve is alive and well. i wholeheartedly agree with the authors that we 3 / 4 bis central bankers'speeches must not be complacent about inflation expectations becoming unmoored, whether at too high or too low a level. see john c. williams, inflation persistence in an era of well - anchored inflation expectations, federal reserve bank of san francisco economic letter 2006 – 27, october 13, 2006. 2 see more amazon effects : online competition and pricing behaviors, jackson hole economic symposium conference proceedings ; federal reserve bank of kansas city, 2018. 3 see alan s. blinder, economic policy and the great stagflation, academic press, 1979 4 see tim mahedy and adam shapiro, what ’ s down with inflation? frbsf economic letter 2017 – 35, november 27, 2017, and andrea tambalotti, stefano eusepi, and bart hobijn, condi : a cost - of - nominal - distortions index, american economic journal : macroeconomics, 3 ( 3 ) : 53 – 91, july 2011. 5 see james h. stock and mark w. watson, slack and cyclically sensitive inflation, working paper. 6 see ulrike malmendier and stefan nagel, learning from inflation experiences,

john c williams : discussion of " prospects for inflation in a high pressure economy : is the phillips curve dead or is it just hibernating? " by peter hooper, frederic s. mishkin, and amir sufi remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the us monetary policy forum, new york city, 22 february 2019. * * * accompanyting tables and figures of the speech. as prepared for delivery. the phillips curve is the connective tissue between the federal reserve ’ s dual mandate goals of maximum employment and price stability. despite regular declarations of its demise, the phillips curve has endured. it is useful, both as an empirical basis for forecasting and for monetary policy analysis. the paper by peter hooper, rick mishkin, and amir sufi — hms for short — provides an in - depth analysis of key aspects of inflation dynamics in the united states and how they may have changed. this study is particularly timely against the backdrop of an emerging consensus that the phillips curve has become nearly flat. if this is true it would fundamentally alter the employment - inflation trade - offs the fed confronts. there is a lot to like about this paper : it synthesizes existing research, new analysis, and bridges the study of wages and prices. too often these are studied in isolation. but most significant, as someone who has discussed papers at the usmpf that reached the century mark in page count, this year ’ s paper came in at a relatively svelte 65 pages. i hope this represents a durable structural shift, and isn ’ t merely a reflection of the fact that this year ’ s paper has three authors rather than the usual four. the paper covers a lot of ground, so i will only summarize a few key takeaways. first, hms find evidence of asymmetric effects of unemployment on both price and wage inflation, with very low rates of unemployment leading to disproportionately large movements in inflation. that is, the phillips curve is very much alive in very tight labor markets. second, they find that the dynamics of price inflation have changed in important ways ; specifically, it has become less sensitive to the business cycle and less persistent. finally, they draw the policy conclusion that fed policymakers should not be complacent about the possibility of a resurgence of inflation in the context of a tight labor market. in my remarks, i will discuss two issues. first