Arbeitspapier
A Note on Inflation Persistence
Macroeconomists have for some time been aware that the New Keynesian Phillips curve, though highly popular in the literature, cannot explain the persistence observed in actual inflation. We argue that one of the more prominent alternative formulations, the Fuhrer and Moore (1995) relative contracting model, is highly problematic. Fuhrer and Moore (1995)'s formulation generates inflation persistence, but this is a consequence of their assuming that workers care about the past real wages of other workers. Making the more reasonable assumption that workers care about the current real wages of other workers, one obtains the standard formulation with no inflation persistence.
- ISBN
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82-7553-205-1
- Language
-
Englisch
- Bibliographic citation
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Series: Working Paper ; No. 2002/14
- Classification
-
Wirtschaft
Price Level; Inflation; Deflation
- Subject
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New Keynesian Phillips curve
Fuhrer and Moore model
inflation persistence
- Event
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Geistige Schöpfung
- (who)
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Holden, Steinar
Driscoll, John C.
- Event
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Veröffentlichung
- (who)
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Norges Bank
- (where)
-
Oslo
- (when)
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2002
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Holden, Steinar
- Driscoll, John C.
- Norges Bank
Time of origin
- 2002
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