Dampened expectations in the Phillips Curve: a note

Charles Dennery

MPRA Paper from University Library of Munich, Germany

Abstract: Dampened inflation expectations have a significant impact on the New Keynesian Phillips Curve. This dampening not only flattens the long run Phillips Curve, but it can also lead to a bias in the estimation of its short run slope. It also affects the response of a small NK model to demand shocks, and affects the optimal monetary policy: in particular, the price targeting result of the Ramsey policy is violated when there is dampening.

Keywords: Anchored expectations; Phillips Curve; Ramsey policy (search for similar items in EconPapers)
JEL-codes: E31 E52 (search for similar items in EconPapers)
Date: 2019-08-21
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Dampened expectations in the Phillips Curve: A note (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:98189

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