One big problem has been the absence of deflation. The “accelerationist” Phillips curve that used to be standard — inflation depends on unemployment and lagged inflation — seemed consistent with the experience from previous big slumps, which were associated with large declines in the rate of inflation. Specifically, we used to cite the “clockwise spirals” one saw in unemployment-inflation space as evidence for something like the Friedman-Phelps theory of the natural rate.Here's Krugman in 2011 on CNN warning about the deflation threat (starts at 4:35),
But what worked in the 70s and 80s doesn’t look so good for recent experience...
Why didn’t the sustained high unemployment after 2008 push us into deflation?