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research article
Dampened expectations in the Phillips Curve: A note
August 23, 2019
Dampened inflation expectations have a significant impact on the New Keynesian Phillips Curve. This dampening not only flattens the long run Phillips Curve, but it can also lead to a bias in the estimation of its short run slope. It also affects the response of a small NK model to demand shocks, and affects the optimal monetary policy: in particular, the price targeting result of the Ramsey policy is violated when there is dampening.
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Name
Dampened expectations.pdf
Type
Preprint
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embargo
Embargo End Date
2021-08-22
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CC BY-NC-ND
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285.08 KB
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Adobe PDF
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