Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/60552
Authors: 
Sbordone, Argia M.
Year of Publication: 
2005
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 204
Abstract: 
This article discusses a more general interpretation of the two-step minimum distance estimation procedure proposed in earlier work by Sbordone. The estimator is again applied to a version of the New Keynesian Phillips curve, in which inflation dynamics are driven by the expected evolution of marginal costs. The article clarifies econometric issues, addresses concerns about uncertainty and model misspecification raised in recent studies, and assesses the robustness of previous results. While confirming the importance of forward-looking terms in accounting for inflation dynamics, it suggests how the methodology can be applied to extend the analysis of inflation to a multivariate setting
JEL: 
E31
E32
Document Type: 
Working Paper

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