Equilibrium Yield Curve, the Phillips Curve, and Monetary Policy

Inflation Expectations , the Phillips Curve and Monetary Policy

Conjectures about inflation expectations are inextricably linked to our understanding of the relationship between the real and monetary sides of the economy; yet, direct empirical research on the matter has been scarce at best. This paper therefore examines the empirical properties of inflation expectations data constructed on the basis of both qualitative and quantitative surveys of consumers ...

Optimal monetary policy in a Phillips-curve world

In this paper we study optimal monetary policy in a model that integrates the modern theory of unemployment with a liquidity model of monetary transmission. Two policy environments are considered: period by period optimization (time consistency) and full commitment (Ramsey allocation). When the economy is subject to productivity shocks, the optimal policy is pro-cyclical. We also characterize t...

The Wage Curve and the Phillips Curve

Blanchflower and Oswald (1994) have argued that, in regional data, the level of unemployment is related to the fevel of wages. This result is at variance with an application of the original Phillips curve to regional data, which would predict that the change in wages ought to be related to the unemployment rate. On the other hand, there is considerable empirical support for the expectations-aug...

The Phillips Curve

Nonlinear Phillips Curve and Monetary Policy in a Keynesian Macroeconometric Model

In the framework of a Keynesian monetary macro model we study implications of a kinked Phillips-Curve and alternativemonetary policy rules. As alternative monetary policy rules we consider monetary growth targeting and interest rate targeting (the Taylor rule). Our monetary macro model exhibits: asset market clearing, disequilibrium in product and labor markets, sluggish price and quantity adju...