EconStor >
Humboldt-Universität Berlin >
Sonderforschungsbereich 649: Ökonomisches Risiko, Humboldt-Universität Berlin >
SFB 649 Discussion Papers, HU Berlin >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/39327
  
Title:Can the New Keynesian Phillips Curve explain inflation gap persistence? PDF Logo
Authors:Yao, Fang
Issue Date:2010
Series/Report no.:SFB 649 discussion paper 2010,030
Abstract:Whelan (2007) found that the generalized Calvo-sticky-price model fails to replicate a typical feature of the empirical reduced-form Phillips curve - the positive dependence of inflation on its own lags. In this paper, I show hat it is the 4-period-Taylor-contract hazard function he chose that gives rise to this result. In contrast, an empirically-based aggregate price reset hazard function can generate simulated data that are consistent with inflation gap persistence found in US CPI data. I conclude that a non-constant price reset hazard plays a crucial role for generating realistic inflation dynamics.
Subjects:Inflation gap persistence
Trend inflation
New Keynesian Phillips curve
Hazard function
JEL:E12
E31
Document Type:Working Paper
Appears in Collections:SFB 649 Discussion Papers, HU Berlin

Files in This Item:
File Description SizeFormat
628585152.pdf321.29 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/39327

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.