Arbeitspapier
Can the New Keynesian Phillips Curve explain inflation gap persistence?
Whelan (2007) found that the generalized Calvo-sticky-price model fails to replicate a typical feature of the empirical reduced-form Phillips curve - the positive dependence of inflation on its own lags. In this paper, I show hat it is the 4-period-Taylor-contract hazard function he chose that gives rise to this result. In contrast, an empirically-based aggregate price reset hazard function can generate simulated data that are consistent with inflation gap persistence found in US CPI data. I conclude that a non-constant price reset hazard plays a crucial role for generating realistic inflation dynamics.
- Language
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Englisch
- Bibliographic citation
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Series: SFB 649 Discussion Paper ; No. 2010,030
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Price Level; Inflation; Deflation
Trend inflation
New Keynesian Phillips curve
Hazard function
New-Keynesian Phillips Curve
Inflationsrate
Preisrigidität
Statistische Bestandsanalyse
Schätzung
Lebenshaltungsindex
USA
- Handle
- Last update
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20.09.2024, 8:21 AM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Yao, Fang
- Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
Time of origin
- 2010