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A New Keynesian Framework and Wage and Price Dynamics in the US

Bjørnar Karlsen Kivedal ()

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: New Keynesian model with wages and prices is introduced and estimated by maximum likelihood. The steady state relationships of the model are imposed as testable restrictions on the long-run cointegrating relationships in an equilibrium correction framework, giving an equilibrium correction model with imposed theoretical restrictions from a New Keynesian model. Short-run properties are also estimated and investigated. The results indicate that the main aspects of the theoretical model cannot be rejected. Hence, New Keynesian models may be combined with a more general vector autoregressive framework in order to conduct estimation.

Keywords: Cointegration; New Keynesian models; steady state; wages; prices; unemployment; equilibrium correction. (search for similar items in EconPapers)
JEL-codes: C32 E24 E31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2013-07-30
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http://www.svt.ntnu.no/iso/WP/2013/13_newkeyneswage_BKK.pdf (application/pdf)

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Journal Article: A new Keynesian framework and wage and price dynamics in the USA (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:15113

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