If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the … target, the long-run Phillips curve becomes non-vertical. During 1997-2011, average inflation expectations in Sweden have … been close to the inflation target of 2 percent, whereas average inflation has fallen short of the target by 0.6 percentage …

long run Phillips curve recorded -0.75 in Sweden and -0.23 in the United States. While the average inflation rate in the … United States was very close to its targeted level, the average inflation rate in Sweden was 0.6 per- centage points below … its targeted level over the sample period. The deviation of inflation rate from its targeted level in Sweden resulted in …