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Sticky prices, competition and the Phillips curve
Mikosch, Heiner Felix - 2012
weak competition. In line with the theory, prices of products, that face very strong competition, are also less likely to …
Persistent link: https://www.econbiz.de/10010319699
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An optimizing model of US wage and price dynamics
Sbordone, Argia M. - 2001
The objective of this paper is to provide an optimizing model of wage and price setting consistent with U.S. data. The paper first investigates the predictions of an optimizing labor supply model for the aggregate nominal wage, taking as given the evolution of prices and quantities. In this part...
Persistent link: https://www.econbiz.de/10010318359
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Prices and unit labor costs: A new test of price stickiness
Sbordone, Argia M. - 2001
This paper investigates the predictions of a simple optimizing model of nominal price rigidity for the dynamics of inflation. Taking as given the paths of nominal labor compensation and labor productivity to approximate the evolution of marginal costs, I determine the path of prices predicted by...
Persistent link: https://www.econbiz.de/10010318369
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Determinacy of equilibrium under various Phillips curves
Ono, Yoshiyasu - 2008
Determinacy of equilibrium under the original, the backward-looking, the forward-looking and the hybrid Phillips curves is examined. If the monetary authority keeps the nominal money stock to be constant, the equilibrium path is always determinate under the original Phillips curve and the...
Persistent link: https://www.econbiz.de/10010332226
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Is There a Long-Run Trade-Off between Inflation and Unemployment?
Axell, Bo; Lang, Harald - 1985
How are inflation and unemployment related in the long run? Are they negatively correlated, as in the so-called naive Phillips curve theories or uncorrelated, 'as in the neo-liberals' view or are they positively correlated as Friedman suggested in his Nobel lecture? In this paper inflation is...
Persistent link: https://www.econbiz.de/10010334647
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Sticky Prices vs. Sticky Information – A Cross-Country Study of Inflation Dynamics
Bredemeier, Christian; Goecke, Henry - 2011
This paper empirically compares sticky-price and sticky-information Phillips curves considering inflation dynamics in six countries (US, UK, Germany, France, Canada, and Japan). We evaluate the models' abilities to match empirical second moments of inflation. Under baseline calibrations, the two...
Persistent link: https://www.econbiz.de/10010274449
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Heterogeneous households in a sticky-price model
Lee, Jae Won - 2009
This paper introduces heterogeneous households into an otherwise standard sticky-price model with industry-specific labor markets. Households differ in labor incomes and asset markets are incomplete. I show that household heterogeneity affects equilibrium dynamics nontrivially by amplifying...
Persistent link: https://www.econbiz.de/10010282838
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The elusive persistence: Wage and price rigidities, the Phillips curve, and inflation dynamics
Tsoukis, Chris; Kapetanios, George; Pearlman, Joseph - 2007
We review the main New Keynesian inflation equations that have arisen as a result of aggregation from individual firms' price rigidities. We find that, on the whole, they cannot account for inflation persistence, a key feature of the empirical dynamics of inflation, and with important policy...
Persistent link: https://www.econbiz.de/10010284218
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Nominal wage adjustment, demand shortage and economic policy
Ono, Yoshiyasu; Ishida, Junichiro - 2009
We formulate nominal wage adjustment by incorporating various concepts of fairness. By applying it into a continuous-time money-in-utility model we examine macroeconomic dynamics with and without a liquidity trap and obtain the condition for persistent unemployment, and that for temporary...
Persistent link: https://www.econbiz.de/10010332224
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The Economics of the Phillips Curve: Formation of Inflation Expectations versus Incorporation of Inflation Expectations
Palley, Thomas I. - 2011
This paper examines the theory of the Phillips curve, focusing on the distinction between "formation" of inflation … expectations and "incorporation" of inflation expectations. Phillips curve theory has largely focused on the former. Explaining the … Phillips curve by reference to expectation formation keeps Phillips curve theory in the policy orbit of natural rate thinking …
Persistent link: https://www.econbiz.de/10010460505