Inflation and Price Changes: Some Preliminary Estimates and Tests of Alternative Theories

In countries experiencing real and nominal shocks, output, relative prices, and the price level do not adjust instantly from one set of long-run equilibrium values to the next. Economists have speculated on the reasons for slow or gradual adjustment without reaching firm conclusions. Currently, the most widely accepted hypothesis to describe the phenomenon is some type of Phillips curve relating the current rate of change of prices to some measure of unemployed resources and to the anticipated rate of price change