Do expected future marginal costs drive inflation dynamics?
By: Argia M. Sbordone.
Contributors: Federal Reserve Bank of New York.
Series: Staff reports ;; no. 204; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 204.
Publisher: Federal Reserve Bank of New York
Published: 2005
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Inflation (Finance) -- Econometric models.; Pricing -- Econometric models.; Markup -- Econometric models.; Keynesian economics -- Mathematical models.
Description: "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"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 3/23/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.