Aggregate Supply and Potential Output

Assaf Razin

No 4217, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The New-Keynesian aggregate supply derives from micro-foundations an inflation-dynamics model very much like the tradition in the monetary literature. Inflation is primarily affected by: (i) economic slack; (ii) expectations; (iii) supply shocks; and (iv) inflation persistence. This Paper extends the New Keynesian aggregate supply relationship to include also fluctuations in potential output, as an additional determinant of the relationship. Implications for monetary rules and to the estimation of the Phillips curve are pointed out.

Keywords: New-keynesian phillips curve; Potential output; Taylor rules (search for similar items in EconPapers)
JEL-codes: E10 E12 E60 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Aggregate Supply and Potential Output (2004)
Working Paper: Aggregate Supply and Potential Output (2004)
Working Paper: Aggregate Supply and Potential Output (2004)
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