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Endogeneity of the labour market slack in reduced-form Phillips Curves (PCs) is usually addressed either by including proxies for omitted supply shocks, or by using instrumental variables. Using the Kiviet (2020) Kinky Least Squares estimator, we find evidence that supply-shock proxies should...
Persistent link: https://www.econbiz.de/10012705429
Using data on product-level prices matched to the producing firm's unit labor cost, we reject the hypothesis of a full and immediate pass-through of marginal cost. Since we focus on idiosyncratic variation, this does not fit the predictions of the Maćkowiak and Wiederholt (2009) version of the...
Persistent link: https://www.econbiz.de/10003963740
capital and use the resulting model to discuss the concept of the 'non-accelerating inflation rate of unemployment'. We then …
Persistent link: https://www.econbiz.de/10003973491
This paper analyses how labour market heterogeneity affects unemployment, productivity and business cycle dynamics that are relevant for monetary policy. The model matches remarkably well the short and long run dynamics of skilled and unskilled workers. Skill mismatch and skill-specific labour...
Persistent link: https://www.econbiz.de/10012880717
explores implications for growth, innovation, inflation, financial markets, fiscal policy, and several socio-economic outcomes …, adjustment in energy markets, increased inflation variability, financial markets stress, intensified innovation, increased …
Persistent link: https://www.econbiz.de/10014230344
commodity prices ; inflation ; non-linearities ; pass-through …
Persistent link: https://www.econbiz.de/10003971302
environment affects how agents learn from new information. We show that as inflation rose in advanced economies, both households … and firms became more attentive and informed about publicly available news about inflation, leading them to respond less … to exogenously provided information about inflation and monetary policy. We also study the effects of RCTs in countries …
Persistent link: https://www.econbiz.de/10014490479
We explain the role of the Phillips Curve in the analysis of the economic outlook and the formulation of monetary policy at the ECB. First, revisiting the structural Phillips Curve, we highlight the challenges in recovering structural parameters from reduced-form estimates and relate the...
Persistent link: https://www.econbiz.de/10012212851
Can the aging process affect inflation? The prolonged decline of fertility and mortality rates induces a persistent … downward pressure on the natural interest rate. If this development is not internalized by the monetary policy rule, inflation … inflation found in the data for the euro area. In this model, continuing to follow the same rule makes inflation to be on a …
Persistent link: https://www.econbiz.de/10012181303
policy rules and of the optimal unconstrained rule under commitment. The study reaches two main conclusions. First, inflation …
Persistent link: https://www.econbiz.de/10003310803