The paper introduces the concept of covariance decomposition in a vector autoregression system. It is applied to the negative relationship between real stock returns and inflation in the postwar United States, and examine whether monetary policy accounts for the negative covariance. When the...

type="main" <p>We estimate the open economy new Keynesian Philips curve (NKPC) to characterize the inflation dynamics of Korea. While recent studies show that the NKPC holds for the pre-currency crisis period, the empirical evidence is inconclusive for the post-crisis period. Has globalization...</p>