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Exploitability as a Specification Test of the Phillips Curve

Minford, Patrick; Peel, David - C.E.P.R. Discussion Papers - 2002

Nominal price and wage rigidity renders monetary policy effective over output. However, this effectiveness extends, under widely used overlapping-wage and Calvo-contract Phillips Curves, to planned monetary policy (‘exploitability’) and not merely to policy surprises. We argue that within...

Persistent link: https://www.econbiz.de/10005662276

Inflation Dynamics with Search Frictions: A Structural Econometric Analysis

Krause, Michael; López-Salido, J David; Lubik, Thomas - C.E.P.R. Discussion Papers - 2008

The New Keynesian Phillips curve explains inflation dynamics as being driven by current and expected future real marginal costs. In competitive labour markets, the labour share can serve as a proxy for the latter. In this paper, we study the role of real marginal cost components implied by...

Persistent link: https://www.econbiz.de/10005792530

Unemployment in an Estimated New Keynesian Model

Galí, Jordi; Smets, Frank; Wouters, Rafael - C.E.P.R. Discussion Papers - 2011

We reformulate the Smets-Wouters (2007) framework by embedding the theory of unemployment proposed in Galí (2011a …,b). We estimate the resulting model using postwar U.S. data, while treating the unemployment rate as an additional observable … output gap. In addition, the estimated model can be used to analyze the sources of unemployment fluctuations. …

Persistent link: https://www.econbiz.de/10009024487

Hyperbolic Discounting and Positive Optimal Inflation

Graham, Liam; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2011

The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al. (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...

Persistent link: https://www.econbiz.de/10009643503

The European Phillips Curve: Does the NAIRU Exist?

Karanassou, Marika; Sala, Hector; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2003

model, covering a panel of EU countries, and derives the implied long-run inflation-unemployment tradeoff. Our results …

Persistent link: https://www.econbiz.de/10005667015