Elusive Persistence: Wage and Price Rigidities, the New Keynesian Phillips Curve and Inflation Dynamics

Tsoukis, Christopher; Kapetanios, George; Pearlman, Joseph

doi:10.1111/j.1467-6419.2009.00622.x

Cited by 11 publications

(11 citation statements)

References 77 publications

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“…The share of backward‐looking price resetters is around 45%. This constellation is also a common finding in the literature (e.g., Galí and Gertler , Table , Tsoukis, Kapetanios, and Pearlman ) (although with our proviso of a significant slope).…”

Section: Estimationssupporting

confidence: 87%

Technology, Utilization, and Inflation: What Drives the New Keynesian Phillips Curve?

McAdam¹,

Willman²

2013

J of Money Credit Banking

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract 4 Non-technical summary 5 Terms of use: Documents in

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Section: Estimationssupporting

confidence: 87%

Technology, Utilization, and Inflation: What Drives the New Keynesian Phillips Curve?

McAdam¹,

Willman²

2013

J of Money Credit Banking

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“…Since the first empirical work on the NKPC, there have been significant methodological developments in the area of estimation with weak instruments, and our analysis draws heavily on these methods to help explain the puzzles in the literature. Earlier surveys on the NKPC include Henry and Pagan (2004), Ólafsson (2006), Rudd and Whelan (2007), Nason and Smith (2008b) and Tsoukis et al (2011). We extend these surveys by emphasizing the many econometric issues raised by estimation of the NKPC, and our empirical analysis spans a much wider range of estimation approaches and specifications than what previous individual papers have considered (in fact, we suspect we estimated more NKPC specifications than the entire preceding literature combined).…”

Section: Introductionmentioning

confidence: 80%

Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve

Mavroeidis

Plagborg‐Møller

Stock

2014

Journal of Economic Literature

291

250

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We review the main identification strategies and empirical evidence on the role of expectations in the new Keynesian Phillips curve, paying particular attention to the issue of weak identification. Our goal is to provide a clear understanding of the role of expectations that integrates across the different papers and specifications in the literature. We discuss the properties of the various limited-information econometric methods used in the literature and provide explanations of why they produce conflicting results. Using a common data set and a flexible empirical approach, we find that researchers are faced with substantial specification uncertainty, as different combinations of various a priori reasonable specification choices give rise to a vast set of point estimates. Moreover, given a specification, estimation is subject to considerable sampling uncertainty due to weak identification. We highlight the assumptions that seem to matter most for identification and the configuration of point estimates. We conclude that the literature has reached a limit on how much can be learned about the new Keynesian Phillips curve from aggregate macroeconomic time series. New identification approaches and new data sets are needed to reach an empirical consensus.

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“…The remaining firms set prices optimally as a fixed markup, μ, over discounted expected marginal costs. When resetting, firms also take into account that the price may be fixed for many future periods, yielding the optimal reset price

p_{t}^{*}

(see Tsoukis et al ., , for a comprehensive survey)

0true p_{t}^{*} = (1 - θ β) E_{t} \sum_{k = 0}^{\infty} {false(θ β false)}^{k} ([] m c_{t + k}^{n} + μ)

where

m c^{n}

is (the log of) nominal marginal costs, β is a discount factor, and

E_{t}

is the expectation operator. The overall price level is then a weighted average of lagged and reset prices,

p_{t} = θ p_{t - 1} + false(1 - θ false) p_{t}^{*}

.…”

Section: An Application: New Keynesian Phillips Curvesmentioning

confidence: 99%

Will the “True” Labor Share Stand Up? An Applied Survey on Labor Share Measures

Mućk

McAdam

Growiec

2018

Journal of Economic Surveys

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Labor's share of income is a key variable in economics. It plays a leading role in analysis of (in)equality, globalization, technical change, growth theories, etc. Notwithstanding this broad application, there are many different definitions of the labor share. Understanding and synthesizing those differences is the purpose of this applied survey. Empirical measures may vary reflecting the allocation of income components that cannot be directly ascribed to capital or labor. We examine the alternative assumptions made in the literature in this regard and quantify and motivate the resulting discrepancies. Focusing (mostly) on US data, we show that different measures can have very distinct properties in terms of the observed stochastic trends, shares of short-, medium-, and long-run variation and volatilities, persistence and mean-reversion properties, and susceptibility to structural breaks. For instance, while "short-run" properties of the surveyed labor share measures are relatively consistent across all definitions (and countercyclical), their "medium-" and "long-run" trends may diverge substantially (and are procyclical). To substantiate our analysis, we document the implications of discrepancies in the empirical labor share definition for growth accounting, analyzing the effect of technology shocks, and for estimating inflation dynamics.

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Elusive Persistence: Wage and Price Rigidities, the New Keynesian Phillips Curve and Inflation Dynamics

Cited by 11 publications

References 77 publications

Technology, Utilization, and Inflation: What Drives the New Keynesian Phillips Curve?

Technology, Utilization, and Inflation: What Drives the New Keynesian Phillips Curve?

Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve

Will the “True” Labor Share Stand Up? An Applied Survey on Labor Share Measures

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