Do financial crises erode potential output? Evidence from OECD inflation responses

► We study the impact of financial crises on inflation in OECD countries. ► We estimate stylized Phillips curves using panel data regressions. ► Inflation is more responsive to growth after crises compared to non-crisis downturns. ► Our results suggest that financial crises lead to impairment in productive potential. ► Policy might need to be tightened more aggressively during the recovery phase.