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The real effects of money growth in dynamic general equilibrium

Graham, Liam; Snower, Dennis J. - European Central Bank - 2004

We analyse the effects of money growth within a standard New Keynesian framework and show that the interaction between staggered nominal contracts and money growth leads to a long-run trade-off between output and money growth. We explore the microeconomic mechanisms that lead to this trade-off,...

Persistent link: https://www.econbiz.de/10005162920

National prices and wage setting in a currency union

Sánchez, Marcelo - European Central Bank - 2009

Existing work on wage bargaining (as exemplified by Cukierman and Lippi, 2001) typicallypredicts more aggressive wage setting under monetary union. This insight has not beenconfirmed by the EMU experience, which has been characterised by wage moderation,thereby eliciting criticism from Posen and...

Persistent link: https://www.econbiz.de/10005866574

Natural rate doubts

Beyer, Andreas; Farmer, Roger E. A. - European Central Bank - 2002

We study the low frequency comovements in unemployment, inflation and the federal funds rate in the U.S. From 1970 … buildup of inflation in the 1970's is that the Fed reacted to an increase in the natural rate of unemployment by conducting an … in the real interest rate that was translated into a simultaneous increase in unemployment and inflation by passive Fed …

Persistent link: https://www.econbiz.de/10005344826

Real price and wage rigidities in a model with matching frictions

Kuester, Keith - European Central Bank - 2007

This paper incorporates search and matching frictions in the labor market into a New Keynesian model. In contrast to the literature, the labor market activity takes place in the (Calvo-staggered) price-setting sector. Matching frictions lead price-setting firms to negotiate wage rates with their...

Persistent link: https://www.econbiz.de/10005344864

Understanding the dynamics of labor shares and inflation

Lawless, Martina; Whelan, Karl - European Central Bank - 2007

Calvo-style models of nominal rigidities currently provide the dominant paradigm for understanding the linkages between wage and price dynamics. Recent empirical implementations stress the idea that these models link inflation to the behavior of the labor share of income. Gali, Gertler, and...

Persistent link: https://www.econbiz.de/10005344880

Trend-cycle decomposition of output and euro area inflation forecasts: a real-time approach based on model combination

Guérin, Pierre; Maurin, Laurent; Mohr, Matthias - European Central Bank - 2011

The paper focuses on the estimation of the euro area output gap. We construct model-averaged measures of the output gap in order to cope with both model uncertainty and parameter instability that are inherent to trend-cycle decomposition models of GDP. We first estimate nine models of...

Persistent link: https://www.econbiz.de/10009321877

The Phillips curve and long-term unemployment

Llaudes, Ricardo - European Central Bank - 2005

This paper studies the role of long-term unemployment in the determination of prices and wages. Labor market theories … propose a new specification of the Phillips Curve that contains different unemployment lengths in a time-varying NAIRU setting …. This is done by constructing an index of unemployment that assigns different weights to the unemployed based on the length …

Persistent link: https://www.econbiz.de/10005530821

The conquest of U.S. inflation: learning and robustness to model uncertainty

Cogley, Timothy; Sargent, Thomas J. - European Central Bank - 2005

Previous studies have interpreted the rise and fall of U.S. inflation after World War II in terms of the Fed's changing views about the natural rate hypothesis but have left an important question unanswered. Why was the Fed so slow to implement the low-inflation policy recommended by a natural...

Persistent link: https://www.econbiz.de/10005530845

Asymptotic confidence bands for the estimated autocovariance and autocorrelation functions of vector autoregressive models

Coenen, Günter - European Central Bank - 2000

This paper provides closed-form formulae for computing the asymptotic standard errors of the estimated autocovariance and autocorrelation functions for stable VAR models by means of the d-method. These standard errors can be used to construct asymptotic confidence bands for the estimated...

Persistent link: https://www.econbiz.de/10005531003

Estimating Phillips curves in turbulent times using the ECB's survey of professional forecasters

Koop, Gary; Onorante, Luca - European Central Bank - 2012

This paper uses forecasts from the European Central Bank’s Survey of Professional Forecasters to investigate the relationship between inflation and inflation expectations in the euro area. We use theoretical structures based on the New Keynesian and Neoclassical Phillips curves to inform our...

Persistent link: https://www.econbiz.de/10010686766