The New-Keynesian Phillips curve has recently become an important ingredient in monetary policy models. However, using limited information methods, the empirical support for the New-Keynesian Phillips curve appear to be mixed. This paper argues, by means of Monte Carlo simulations with a simple...

In this paper, I try to shed some new light on the puzzle why the Lucas critique, belived to be important by most economists, seems to have received very little empirical support. I use a real business cycle model to examine the properties of the super exogeneity test, which is used to detect...

An approach to decomposing and interpreting the inflation process is proposed. It suggests that the low U.S. inflation rate in recent years reflects a structural development, but that the low levels of unemployment may be a mainly cyclical phenomenon.

A new approach is proposed for estimating potential output and the NAIRU. Identification is achieved using Okun's law and a Phillips curve. The performance of the methodology is exemplified using data from Canada, the UK, and the US.