Orland, Andreas; Roos, Michael W.M. - Rheinisch-Westfälisches Institut für … - 2011
Empirical estimations of the New Keynesian Phillips curve support hybrid versions with a positive weight on lagged infl ation and a weight less than one on expected infl ation. We argue that myopic price setting of some agents explains the low weight on expected infl ation. The lagged term can...