Relative Price Adjustment and the UK Phillips Curve

Nazif Catik () and Christopher Martin

Economics Bulletin, 2010, vol. 30, issue 3, 1737-1744

Abstract: We find that measures of the distribution of relative price changes are significant when included in a standard model of the UK Phillips curve based on time dependent price adjustment. Since the inclusion of these variables is not implied by this model but is implied by a state-dependent model of price adjustment or by a time-dependent model with allowance for heterogeneity among price-setters, we conclude that the familiar time-dependent model does not provide a complete account of the Phillips curve.

Keywords: New Keynesian Phillips curve; Relative Price Changes; Labour share (search for similar items in EconPapers)
JEL-codes: C1 E3 (search for similar items in EconPapers)
Date: 2010-07-11
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