Anatomy of the Phillips Curve: Micro Evidence and Macro Implications

Luca Gagliardone, Mark Gertler, Simone Lenzu and Joris Tielens

No 31382, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a bottom-up approach to estimate the slope of the primitive form of the New Keynesian Phillips curve, which features marginal cost as the real activity variable. Using quarterly micro data on prices, costs, and output, we estimate dynamic pass-through regressions that identify the slope as a function of primitive parameters. We find a high slope for the cost-based Phillips curve, which contrasts with the low estimates of the conventional output gap-based formulation found in the literature. We reconcile by showing that the output elasticity of marginal cost is low, at least during moderate inflation periods (e.g., pre-pandemic).

JEL-codes: E31 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-mac
Note: EFG ME
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.nber.org/papers/w31382.pdf (application/pdf)

Related works:
Working Paper: Anatomy of the Phillips Curve: micro evidence and macro implications (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:31382

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31382

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().