Robustness of the Estimates of the Hybrid New Keynesian Phillips Curve

Mark Gertler, J. David López-Salido and Jordi Galí
Authors registered in the RePEc Author Service: Jordi Galí and J. David Lopez-Salido

No 44, Working Papers from Barcelona School of Economics

Abstract: Galí and Gertler (1999) developed a hybrid variation of the New Keynesian Phillips curve that relates inflation to real marginal cost, expected future inflation and lagged inflation. GMM estimates of the model suggest that forward looking behavior is highly important; the coefficient on expected future inflation is large and highly significant. Several authors have argued that our results may be the product of either some form of specification bias or poor estimation methods. Here we show that these claims are incorrect. We show that our results are robust to a variety of estimation procedures, including GMM estimation of the closed form, and nonlinear instrumental variables. Hence the conclusions of GG and others regarding the importance of forward looking behavior appear to be robust.

Keywords: Phillips curve; sticky prices; marginal costs (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
https://bw.bse.eu/wp-content/uploads/2020/01/1144-file.pdf (application/pdf)

Related works:
Journal Article: Robustness of the estimates of the hybrid New Keynesian Phillips curve (2005)
Working Paper: Robustness of the Estimates of the Hybrid New Keynesian Phillips Curve (2005)
Working Paper: Robustness of the Estimates of the Hybrid New Keynesian Phillips Curve (2005)
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:bge:wpaper:44

Access Statistics for this paper

More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar ().