About the sources of the inflation persistence in Russia

Ekaterina Ponomareva

Working Papers from Gaidar Institute for Economic Policy

Abstract: The standard way to obtain the equation of New Keynesian Phillips curve is to linearize the equilibrium conditions of the Calvo model around a steady state with zero inflation. This approach is appropriate only in the low-inflation economics. This paper considers New Keynesian Phillips curve derived by linearizing the same equilibrium conditions around the time varying inflation trend. This model explains observed inflation persistence in different way and gives the different view on the ratio of agents with backward- and forward-looking expectations. In the paper estimated New Keynesian Phillips curve with time varying coefficients. This model shows that in Russia exist at least two sources of the inflation persistence.

Keywords: : New Keynesian Phillips Curve; backward- and forward-looking expectations; inflation persistence; Bayesian VAR (search for similar items in EconPapers)
JEL-codes: E12 E31 E52 (search for similar items in EconPapers)
Pages: 14175 words
Date: 2012, Revised 2012
New Economics Papers: this item is included in nep-cis, nep-mac and nep-mon
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https://www.iep.ru/files/RePEc/gai/wpaper/0016Ponomareva.pdf Revised version, 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:gai:wpaper:0016

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