Dampened expectations in the Phillips Curve: a note

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.

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Year of publication:	2019-08-21
Authors:	Dennery, Charles

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Type of publication:	Book / Working Paper
Language:	English
Notes:	Dennery, Charles (2019): Dampened expectations in the Phillips Curve: a note. Published in: Economics Letters , Vol. 184, (November 2019)
Classification:	E31 - Price Level; Inflation; Deflation ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	BASE

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