We develop and estimate a structural model of inflation that allows for a fraction of firms that use a backward looking … measures of marginal cost as the relevant determinant of inflation, as the theory suggests, instead of an ad-hoc output gap …. Real marginal costs are a significant and quantitatively important determinant of inflation. Backward looking price setting …

inflation and a permanent reduction in the level of unemployment. In short, we derive a microfounded long-run downward …

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

shifts in the parameters of wage equations when the process generating price inflation changes. The two major shifts that we …

examining the relationship between inflation and unemployment, which sheds light on these developments. The theoretical section … similar inflation behaviour, in that inflation depends more closely on the capacity utilization rate than on the unemployment … high unemployment does not put downward pressure on the inflation rate. During the 1970s and 1980s in Germany, there …

This paper estimates the NAIRU (standing for the Non-Accelerating Inflation Rate of Unemployment) as a parameter that … varies over time. The NAIRU is the unemployment rate that is consistent with a constant rate of inflation. Its value is … determined in an econometric model in which the inflation rate depends on its own past values (‘inertia’), demand shocks proxied …

, and Belgium and Malta being the largest losers. Governments are net winners of inflation, while the household (HH) sector …, while HHs in Finland and Spain turn out to be net winners of inflation. Considerable heterogeneity exists also within the HH … sector: relatively young middle class HHs are net winners of inflation, while older and richer HHs are losers. As a result …

This Paper takes a new look at the long-run dynamics of inflation and unemployment in response to permanent changes in …, we construct an empirical model of the Spanish economy and, in this context, we evaluate the long-run inflation …

A stable predictive relationship between inflation and the output gap, often referred to as a Phillips curve, provides … univariate and multivariate estimates of the output gap for predicting inflation. Many of the ex post output gap measures we … examine appear to be quite useful for predicting inflation. However, forecasts using real-time estimates of the same measures …