Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86123
Authors: 
D'Amato, Laura
Garegnani, María Lorena
Year of Publication: 
2009
Series/Report no.: 
Working Paper, Central Bank of Argentina (BCRA) 2009/40
Abstract: 
We estimate a 'Hybrid New-Keynesian Phillips Curve' for Argentina between 1993 and 2007. We extend the model to a small open economy, considering separately the influence of nominal devaluation and foreign inflation on domestic prices. For the whole sample, we find that forward and backward-looking components are relevant although the backward-looking term weights more in determining inflation dynamics. We test for parameter stability and find a break-point in 2002 along with the regime change. In line with recent literature on trend inflation, when trend inflation increases, the influence of the output gap weakens and the curve becomes more forward-looking.
Subjects: 
Argentina
inflation dynamics
Phillips Curve
small open economy
JEL: 
C5
E31
Document Type: 
Working Paper

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