We develop a theoretical model that features a business cycle-dependent relation between out- put, price inflation and inflation expectations, augmenting the model by Svensson (1997) with a nonlinear Phillips curve that reflects the rationale underlying the capacity constraint theory (Macklem...

Penninginflation är principiellt oriktig och kan liknas vid forna tiders myntförsämring. Den förvränger alltid marknadsdata - Inte bara relativpriser, men även kassaflöden – vilket försämrar resursallokeringen. ”Deflation” i betydelsen prissänkningar är av ondo enbart om den...

This paper proposes a more general definition of loss avoidance, relates it to fairness and applies it to the labor market. By influencing judgments about what is a fair wage readjustment, it can lead to coordination failures, generating downward nominal wage rigidity (DNWR) and disinflation...

This paper proposes a new econometric framework for estimating trend inflation and the slope of the Phillips curve with a regime-switching model. As a unique aspect of our approach, we assume regimes for the trend inflation at one-percent intervals, and estimate the probability of the trend...

We develop a theoretical model that features a business cycle-dependent relation between output, price inflation and inflation expectations, augmenting the model by Svensson (1997) with a nonlinear Phillips curve that reflects the rationale underlying the capacity constraint theory (Macklem...

Inflation persistence or ‘inertia’ has important consequences for monetary policy. Inflation which does not get eliminated today tends to persist entailing higher costs in the future. In turn, a monetary regime can exert significant influence on inflation persistence by its credibility and...

This paper estimates the expectation-augmented Phillips curve, which explains inflation dynamics, in Korea. The phenomenon of low inflation in Korea has been going on for quite some time, in particular since 2012. During the Covid-19 crisis, due to low inflation expectations the operation of...

We develop a theoretical model that features a business cycle-dependent relation between out- put, price inflation and inflation expectations, augmenting the model by Svensson (1997) with a nonlinear Phillips curve that reflects the rationale underlying the capacity constraint theory (Macklem...

We extend the Svensson (1997a) inflation forecast targeting framework with a convex Phillips curve. We derive an asymmetric target rule, that implies a higher level of nominal interest rates than the Svensson (1997a) forward looking version of the reaction function popularized by Taylor (1993)....

This paper estimates the expectation-augmented Phillips curve, which explains inflation dynamics, in Korea. The phenomenon of low inflation in Korea has been going on for quite some time, in particular since 2012. During the Covid-19 crisis, due to low inflation expectations the operation of...