How New Keynesian is the US Phillips curve?

Ragna Alstadheim ()

No 2013/25, Working Paper from Norges Bank

Abstract: I provide a generalization of Calvo price setting, to include non-overlapping contracts as a special case and embed this in a small DSGE model. The resulting Generalized Phillips Curve (GPC) nests New-Keynesian and Neoclassical versions. I linearize the model around a potentially non-zero trend in.ation rate, and estimate it on US data using Bayesian methods, allowing for Markov switching in the variances of structural shocks. I find that the Phillips curve is 100% New Keynesian. There is no evidence of either forward or backward indexation. I illustrate that trend in.ation a¤ects the estimation of the Phillips curve.

Keywords: Phillips curve; neoclassical; indexation; trend inflation; regime switch (search for similar items in EconPapers)
JEL-codes: E13 E31 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2013-12-05
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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