The use of real-time information in Phillips-curve relationships for the euro area

Using OECD panel data for the euro-area countries over 1977-2003, we explore how information available at the time affects the performance of the Phillips curve. We consider forecasts, published by the OECD, as representations of expectations and the use of 'real-time data' for inflation, constructing output gaps and instruments used in estimation. The most important use of real-time information is in using forecasts made at the time to represent expectations; real-time data indicate that the balance of expectations formation was more forward- than backward-looking; revised data suggest less forward-looking and less well-determined behavior.