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shifts in the parameters of wage equations when the process generating price inflation changes. The two major shifts that we …
Persistent link: https://www.econbiz.de/10005661752
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 …
Persistent link: https://www.econbiz.de/10005661839
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
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 …
Persistent link: https://www.econbiz.de/10005791238
inflation and a permanent reduction in the level of unemployment. In short, we derive a microfounded long-run downward …
Persistent link: https://www.econbiz.de/10005791529
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 …
Persistent link: https://www.econbiz.de/10005123935
, 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 …
Persistent link: https://www.econbiz.de/10011084690
Why is inflation so much lower and at the same time more stable in developed economies in the 1990s, compared with the … inflation equilibrium. Our argument builds on the story proposed by Tom Sargent in The conquest of American inflation, where the … fall in inflation in the 1980s was attributed to the changing beliefs informing monetary policy. To explain the escape in …
Persistent link: https://www.econbiz.de/10005504556
The Paper extends Woodford’s (2000) analysis of the closed economy Phillips curve to an open economy with both commodity trade and capital mobility. We show that consumption smoothing, which comes with the opening of the capital market, raises the degree of strategic complementarity among...
Persistent link: https://www.econbiz.de/10005497815
The Paper derives an open economy New-Keynesian Phillips curve. The Phillips curve depends on growth in the domestic economy excess capacity, differential growth between foreign output and domestic output, and on the surprise depreciation of the real exchange rate. The Paper provides new...
Persistent link: https://www.econbiz.de/10005498133