Price and wage inflation persistence across countries and monetary regimes

Beqiraj Elton, Giovanni Di Bartolomeo () and Marco Di Pietro ()

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Abstract: We augmented a macro-model with intrinsic-inflation inertia assuming that prices farer in the past are more likely to be reset. After estimating the model for seven economies, we compared price/wage structures and explored the possibility that their changes can be related to changes in policy stances. We find evidence for duration-dependent-price adjustments. Price and wage stickiness are correlated. Although positively sloped, after few periods, price-hazard functions often become flat as in Calvo-based models. Instead, wage-hazard shapes are in line with Taylor contracts. Regarding monetary policy stances, no systematic effect is found. Observed changes are explained by country-specific factors (e.g., market reforms).

Date: 2020-12
New Economics Papers: this item is included in nep-mac and nep-mon
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Journal Article: Price and wage inflation persistence across countries and monetary regimes (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ter:wpaper:00150

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