Zhang, Chengsi; Murasawa, Yasutomo - In: Economic Modelling 28 (2011) 6, pp. 2462-2468
The New Keynesian Phillips curve implies that the output gap, the deviation of the actual output from its natural level due to nominal rigidities, drives the dynamics of inflation relative to expected inflation and lagged inflation. This paper exploits the empirical success of the New Keynesian...