Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/64442
Authors: 
Kiefer, David
Year of Publication: 
2010
Series/Report no.: 
Working Paper, University of Utah, Department of Economics 2010-03
Abstract: 
Originally presented as an empirical regularity, a variety of microeconomic derivations of the Phillips tradeoff between inflation and real output have been developed. Since these new Phillips curve models are expressed in terms of unobserved variables and expectations, we develop estimates of these unobservables using a state space characterization of the short-run political-economic equilibrium. This method is appropriate because it yields recursive forecasts based on contemporaneous information, and because we apply it to a real-time data set in order to accurately measure available information. Although none of the new Phillips curve tested are completely adequate, we find that Calvo's sticky price formulation provides the best fit for US data. It is inadequate because the estimate coefficient for the driving variable (either the output gap or the marginal cost) is essentially zero.
Subjects: 
new Phillips curve
microfoundations
real-time data
JEL: 
E3
E6
Document Type: 
Working Paper

Files in This Item:
File
Size
878.83 kB





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