The dynamics of the Phillips Curve in New Keynesian, Expectations Augmented and Hybrid forms are extremely sensitive to the choice, timing and restrictions on variables. An important element of the debate revolves round what information decision-makers took into account at the time and round...

This paper examines empirical performance of three different Phillips curve specifications in the euro area.Instead of imposing rational expectations, direct measures, ie OECD forecasts, are used to proxy economic agents' inflation expectations.Real marginal costs are measured in three different...