The New Keynesian Phillips Curve: Some Counterfactual Evidence

New Keynesian models of the business cycle have become the new paradigm of monetary economics, often used for policy analysis. This paper shows that this class of models fail in one crucial respect: they imply a strong negative contemporaneous correlation between inflation and output. Furthermore, this result is robust to parameter values and specification of the inflation equation.

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Year of publication:	2003-12-05
Authors:	Paez-Farrell, Juan
Institutions:	EconWPA
Subject:	New Keynesian Models \| Output Inflation

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Extent:	application/pdf
Series:	Macroeconomics.
Type of publication:	Book / Working Paper
Notes:	Type of Document - ; pages: 16 16 pages
Classification:	E20 - Consumption, Saving, Production, Employment, and Investment. General ; E31 - Price Level; Inflation; Deflation ; E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005126399