Partial Indexation and Inflation Dynamics: What Do the Data Say?

Jean-Guillaume Sahuc

No 04-06, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: We provide new evidence on the fit of the hybrid Phillips curve based on indexation of prices to lagged inflation and trend inflation for the Euro area and the United States over the period 1970-2002. The GMM-West estimates suggest that (i) a full indexation scheme is not data consistent whereas a partial indexation scheme allows a good fit and (ii) forgetting trend inflation induces overestimating by approximately 3-4 percent of the probability to not change its prices, for reasonable values of trend inflation.

Keywords: Phillips curve; inflation inertia; trend inflation; degree of indexation (search for similar items in EconPapers)
JEL-codes: C22 E31 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.univ-evry.fr/fileadmin/mediatheque/uev ... es/Epee/wp/04-06.pdf (application/pdf)

Related works:
Journal Article: Partial indexation and inflation dynamics: what do the data say? (2004)
Working Paper: Partial indexation and inflation dynamics: what do the data say? (2004)
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:eve:wpaper:04-06

Access Statistics for this paper

More papers in Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne Contact information at EDIRC.
Bibliographic data for series maintained by Samuel Nosel ().