Sectoral Phillips curves and the aggregate Phillips curve

Imbs, Jean; Jondeau, Éric; Pelgrin, Florian

doi:10.1016/j.jmoneco.2011.05.013

Cited by 58 publications

(52 citation statements)

References 31 publications

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“…While empirical studies do not identify one single source behind the persistence of inflation differentials (ECB 2003;Honohan and Lane 2003), it is interesting to observe that the impact of aggregation on persistence is generally not investigated. A fully structural model, potentially of the form adopted by Imbs et al (2009) but applied to inflation differentials, may be useful to buttress any policy prescriptions.…”

Section: Resultsmentioning

confidence: 99%

Euro area inflation: aggregation bias and convergence

Byrne

Fiess

2010

Rev World Econ

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Monetary policy of the European Monetary Union targets aggregate euro area inflation. Concerns are growing that a focus on aggregate inflation may cause national inflation rates to diverge. While different explanations for diverging aggregate euro area inflation have been brought forward, the very impact of aggregation on divergence has, however, not been studied. We find a striking difference in convergence depending on the level of aggregation. While aggregate national inflation rates are diverging, disaggregate inflation rates are converging. We find that aggregation appears to bias evidence towards non-convergence. Our results are consistent with prominent theoretical and empirical evidence on aggregation bias.

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Section: Resultsmentioning

confidence: 99%

Euro area inflation: aggregation bias and convergence

Byrne

Fiess

2010

Rev World Econ

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“…We report the results from several methods, but give most emphasis to the CCE IV estimator, as the one most likely to yield consistent estimates. Recent applications of CCE estimators include Baltagi and Li (2014), Bond et al (2010), Eberhardt et al (2013), Holly et al (2010) and Imbs et al (2011).…”

Section: Methodsmentioning

confidence: 99%

Foreign aid and domestic absorption

Temple

Sijpe

2017

Journal of International Economics

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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. We introduce a new 'supply-push' instrument for foreign aid, to be used together with an instrumental variable estimator that filters out unobserved common factors. We use this instrument to study the effects of aid on macroeconomic ratios, and especially the ratios of consumption, investment, imports and exports to GDP. We cannot reject the hypothesis that aid is fully absorbed rather than used to build foreign reserves or exiting as capital flight, nor do we find evidence of Dutch Disease effects. Aid leads to higher consumption, while the evidence that it promotes investment is less robust. Terms of use: Documents in EconStor mayJEL-Code: F350.

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“…Cagliarini et al (2011) and Imbs et al (2011) discuss another type of misspecification due to aggregation bias. Building on Carvalho (2006), they show that heterogeneity of (Calvo) price rigidity across economic sectors can bias estimates of average price rigidity upwards and bias estimates of the slope of the aggregate NKPC toward zero.…”

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confidence: 99%

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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Sectoral Phillips curves and the aggregate Phillips curve

Cited by 58 publications

References 31 publications

Euro area inflation: aggregation bias and convergence

Euro area inflation: aggregation bias and convergence

Foreign aid and domestic absorption

Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve

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