Observed Inflation Forecasts and the New Keynesian Phillips Curve
نویسندگان
چکیده
منابع مشابه
Observed Inflation Forecasts and the New Keynesian Phillips Curve
Estimating the micro-founded New Keynesian Phillips Curve using rational inflation expectation proxies has often found that the output gap is not a valid measure of inflation pressure. This paper investigates the empirical success of the NKPC in explaining US inflation, using observed measures of inflation expectations and taking account of serial correlation in the stylized NKPC. Contrary to r...
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www.philadelphiafed.org to the financial instruments that help guard savings from being eroded by inflation.1 Also, households and firms often write contracts that are stated in dollar amounts (nominal terms). A worker may, for example, sign a contract to work over the upcoming year for a fixed dollar amount. If inflation turns out to be higher than what was expected at the time the contract wa...
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The New-Keynesian Phillips curve is usually reported to fit the data better when lagged inflation, and therefore backward-looking price setting, is included in the equation. We argue that the same inflation persistence can be generated by letting the shocks in the economy be highly correlated in a model where price setting is purely forward-looking. Previous estimates in the literature are bias...
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I n most industrialized economies, periods of above average inflation tend to be associated with above average economic activity, for example, as measured by a relatively low unemployment rate. This statistical relationship, known as the Phillips curve, is sometimes invoked when economic commentators suggest that monetary policy should not try to suppress signs of inflation. But this interpreta...
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Phillips curves are central to discussions of inflation dynamics and monetary policy. New Keynesian Phillips curves describe how past inflation, expected future inflation, and a measure of real marginal cost or an output gap drive the current inflation rate. This paper studies the (potential) weak identification of these curves under generalized methods of moments (GMM) and traces this syndrome...
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ژورنال
عنوان ژورنال: Oxford Bulletin of Economics and Statistics
سال: 2009
ISSN: 0305-9049,1468-0084
DOI: 10.1111/j.1468-0084.2009.00544.x