What horizon for targeting inflation?

Akram, Q. Farooq

doi:10.1007/s00181-009-0330-6

Cited by 5 publications

(1 citation statement)

References 21 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In the analysis, they used a theoretically derived rule for setting the interest rate i t , cf. Akram (2010):…”

Section: Wage-price Specifications and Optimal Monetary Policymentioning

confidence: 99%

The Role of Wage Formation in Empirical Macroeconometric Models

Nymoen¹

2021

Oxford Research Encyclopedia of Economics and Finance

View full text Add to dashboard Cite

The specification of model equations for nominal wage setting has important implications for the properties of macroeconometric models and requires system thinking and multiple equation modeling. The main models classes are the Phillips curve model (PCM), the wage–price equilibrium correction model (WP-ECM), and the New Keynesian Phillips curve (NKPCM). The PCM was included in the macroeconometric models of the 1960s. The WP‑ECM arrived in the late 1980s. The NKPCM is central in dynamic stochastic general equilibrium models (DSGEs). The three model classes can be interpreted as different specifications of the system of stochastic difference equations that define the supply side of a medium-term macroeconometric model. This calls for an appraisal of the different wage models, in particular in relation to the concept of the non-accelerating inflation rate of unemployment (NAIRU, or natural rate of unemployment), and of the methods and research strategies used. The construction of macroeconomic model used to be based on the combination of theoretical and practical skills in economic modeling. Wage formation was viewed as being forged between the forces of markets and national institutions. In the age of DSGE models, macroeconomics has become more of a theoretical discipline. Nevertheless, producers of DSGE models make use of hybrid forms if an initial theoretical specification fails to meet a benchmark for acceptable data fit. A common ground therefore exists between the NKPC, WP‑ECM, and PCM, and it is feasible to compare the model types empirically.

show abstract

“…In the analysis, they used a theoretically derived rule for setting the interest rate i t , cf. Akram (2010):…”

Section: Wage-price Specifications and Optimal Monetary Policymentioning

confidence: 99%

The Role of Wage Formation in Empirical Macroeconometric Models

Nymoen¹

2021

Oxford Research Encyclopedia of Economics and Finance

View full text Add to dashboard Cite

show abstract

Is the ECB already following albeit implicitly an average inflation targeting strategy?

Mota¹,

Fernandes²

2022

Research in Economics

View full text Add to dashboard Cite

An Investigation Into the Dynamic Relationship Between Cpi and Ppi: Evidence From the Uk, France and Germany

Woo

Lee

Joe

2018

Singapore Econ. Rev.

View full text Add to dashboard Cite

This paper examines the dynamic relationship between the consumer price index (CPI) and the producer price index (PPI) in the UK, France and Germany from 1997 to 2013. We employ the momentum-threshold autoregressive (MTAR) cointegration model for empirical analysis. The results show that the CPI and the PPI are cointegrated with bi-directional long-run Granger causality between CPI and PPI, signifying the existence of both demand-pull and the cost-push nature of inflation. The estimates of threshold vector error correction models (TVECMs) indicate asymmetric adjustments to equilibrium, where upward adjustments are statistically significant but downward adjustments are sluggish and insignificant. Moreover, we generate the unconditional half-life estimates as a measure of persistence, which reveal robust evidence of complex non-linearities in the adjustment process. Our overall results provide valuable information for policymakers to formulate inflation-control policies and optimal policy horizons under a non-linear framework.

show abstract

What horizon for targeting inflation?

Cited by 5 publications

References 21 publications

The Role of Wage Formation in Empirical Macroeconometric Models

The Role of Wage Formation in Empirical Macroeconometric Models

Is the ECB already following albeit implicitly an average inflation targeting strategy?

An Investigation Into the Dynamic Relationship Between Cpi and Ppi: Evidence From the Uk, France and Germany

Contact Info

Product

Resources

About