IMF, Report: Crisis and Monetary Policy

“One implication of these insights is that we need better aggregate supply models that reflect the pandemic’s lessons. For instance, it will help to further develop sectoral models that differentiate between goods and services and incorporate sectoral capacity constraints to help account for speed effects and nonlinearities at both the sectoral and aggregate levels … But we should also reconsider policy prescriptions widely held prior to the pandemic that were based on a flat Phillips curve.”