Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/172955
Authors: 
Chen, Siyan
Desiderio, Saul
Year of Publication: 
2018
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 12 [Year:] 2018 [Issue:] 2018-2 [Pages:] 1-30
Abstract: 
Understanding what moves the Phillips curve is important to monetary policy. Because the Phillips curve has experienced over time movements similar to those characterizing the Beveridge curve, the authors jointly analyze the two phenomena. They do that through an agent-based macro model based on adaptive micro-foundations, which works fairly well in replicating a number of stylized facts, including the Beveridge curve, the Phillips curve and the Okun curve. By Monte Carlo experiments they explore the mechanisms behind the movements of the Beveridge curve and the Phillips curve. They discovered that shifts of the Beveridge curve are best explained by the intensity of worker reallocation. Reallocation also shifts the Phillips curve in the same direction, suggesting that it may be the reason behind the similarity of the patterns historically recorded for these two curves. This finding may shed new light on what moves the Phillips curve and might have direct implications for the conduction of monetary policy.
Subjects: 
Beveridge curve
Phillips curve
labor market dynamics
agent-based simulations
sensitivity analysis
JEL: 
C63
D51
E31
J30
J63
J64
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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