50,283 research outputs found
Evaluating the German (New Keynesian) Phillips Curve
No full textThis paper evaluates the New Keynesian Phillips Curve (NKPC) and its hybrid variant within a limited information framework for Germany. The main interest rests on the average frequency of price re-optimization of firms. We use the labor income share as the driving variable and consider a source of real rigidity by allowing for a fixed firm-specific capital stock. A GMM estimation strategy is employed as well as an identification robust method that is based upon the Anderson-Rubin statistic. We find out that the German Phillips Curve is purely forward looking. Moreover, our point estimates are consistent with the view that firms re-optimize prices every two to three quarters. While these estimates seem plausible from an economic point of view, the uncertainties around these estimates are very large and also consistent with perfect nominal price rigidity where firms never re-optimize prices. This analysis also offers some explanations why previous results for the German NKPC based on GMM differ considerably. First, standard GMM results are very sensitive to the way how orthogonality conditions are formulated. Additionally, model misspecifications may be left undetected by conventional J tests. Taken together, this analysis points out the need for identification robust methods to get reliable estimates for the NKPC.inflation dynamics, phillips curve, weak instruments, optimal instruments
Understanding the Flattening Phillips Curve
No full textPolicy-makers have recently noted an apparent flattening of the Phillips curve. The implications of such a change include that a positive output gap would be less inflationary, but the cost of reducing inflation, once established, would increase. This paper’s objective is to review the evidence and possible explanations for the flattening of the Phillips curve in the context of new-Keynesian economic theory. Using data for the United States and Australia, we find that the flattening is evident in the baseline ‘structural’ new-Keynesian Phillips curve. We consider a variety of reasons for this structural flattening, such as data problems, globalisation and alternative definitions of marginal cost, none of which is entirely satisfactory.Phillips curve; inflation
Does Modern Econometrics replicate the Phillips Curve?
No full textThis paper reexamines the existence of a long-run relationship between wages and unemployment in the U.K., with data over the period 1860-1913 used by A.W. Phillips to derive the well-known Phillips Curve. Using Johansen's maximum likelihood method of testing for cointegration, a long-run inverse relationship is indeed depicted between the rate of inflation and the unemployment rate. However, the main impact of deviations from this long-run equilibrium is on the unemployment rate rather than the rate of inflation.Phillips Curve; long-run equilibrium; cointegration
Eli Phillips Letter
No full textEli Phillips was probably born in Pennsylvania in 1839 and was living in Salt Creek, Franklin County, Indiana, in 1850. He joined Company B or the 37th Indiana Regiment as a private in October, 1861, and re-enlisted in October, 1864. Phillips was mustered out in July, 1865. Phillips writes from Goldsboro, New Carolina, on 3 April 1865 to “Friend Anne” and relates that the regiment has been on the move and has had little time to write. He also relays an incident on 30 March in which four members of his regiment were captured by Confederates while on a foraging expedition
Conversatorio con Lisa Garforth=Conversation with Lisa Garforth
No full textJulia Ramírez-Blanco conversa con Lisa Garforth, autora del libro Green Utopias y especialista en utopías medioambientales. Con ella, hablamos acerca de las posibles maneras de definir las ecotopías, y cómo estas se manifiestan tanto en la literatura como en distintas formas de práctica social.Julia Ramírez-Blanco interviews Lisa Garforth, author of the book Green Utopias and specialist in environmental utopias. With her, we talk about the possible ways of defining ecotopias, and how they manifest themselves both in literature and in different forms of social practice.http://re-visiones.net/audio/Entrevista-Lisa-Garfoth.mp
Phillips Letter Re: Students 1
No full textOne page letter from Dr. G.W. Phillips to Fr. Nobili inquirig about students Willie and Charlie Todd
Phillips Letter Re: Students 2
No full textOne page letter from Dr. G.W. Phillips to Fr. Nobili advising Nobili to send Willie Todd home
The New Keynesian Phillips Curve and Lagged Inflation: A Case of Spurious Correlation?
No full textThe New Keynesian Phillips Curve (NKPC) specifies a relationship between inflation and a forcing variable and the current period’s expectation of future inflation. Most empirical estimates of the NKPC, typically based on Generalized Method of Moments (GMM) estimation, have found a significant role for lagged inflation, producing a “hybrid” NKPC. Using U.S. quarterly data, this paper examines whether the role of lagged inflation in the NKPC might be due to the spurious outcome of specification biases. Like previous investigators, we employ GMM estimation and, like those investigators, we find a significant effect for lagged inflation. We also use time varying-coefficient (TVC) estimation, a procedure that allows us to directly confront specification biases and spurious relationships. Using three separate measures of expected inflation, we find strong support for the view that, under TVC estimation, the coefficient on expected inflation is near unity and that the role of lagged inflation in the NKPC is spurious.New Keynesian Phillips Curve; time-varying coefficients; spurious relationships
The New Keynesian Phillips curve : lessons from single-equation econometric estimation
No full textWe review single-equation methods for estimating the hybrid New Keynesian Phillips curve (NKPC) and then apply those methods to U.S. quarterly data for 1955?2007. Estimating the hybrid NKPC by the generalized method of moments yields stable coefficients with a large role for expected future inflation. Measures of marginal costs better explain U.S. inflation than does a range of measures of the output gap. But estimates of the slope of the NKPC are imprecise and confidence intervals that are robust to weak identification are wide. Further research on measuring marginal costs may reconcile these mixed findings. A reconciliation is important if the NKPC is to remain a fundamental component of models of the monetary transmission mechanism.Inflation (Finance) ; Phillips curve
What do New-Keynesian Phillips Curves imply for price-level targeting?
No full textThis paper extends the analysis of price-level targeting to a model including the New-Keynesian Phillips Curve. We examine the inflation-output variability tradeoffs implied by optimal inflation and price-level rules. In previous work with the Neoclassical Phillips Curve, we found that the choice between inflation targeting and price-level targeting depended on the amount of persistence in the output gap. That is, if the output gap was not too persistent, or if lagged output did not enter the aggregate supply function, then inflation targets were preferred to price-level targets. When we start with a New-Keynesian Phillips Curve, the amount of persistence in the output gap still affects the relative placement of the inflation-output variability tradeoff. But, contrary to the Neoclassical case, even where the persistence of the output gap in the aggregate supply function is small or nonexistent, the price-level- targeting regime still results in a more favorable tradeoff between output and inflation variability than does an inflation-targeting regime.Phillips curve ; Monetary policy ; Inflation (Finance)
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