Ascari, Guido - In: Rivista di politica economica 99 (2009) 1/3, pp. 23-63
particularly focus on the implications for inflation dynamics. We will show how considering models with time-varying trend … inflation overcomes the initial difficulties of the New Keynesian Phillips Curve to match the empirical persistence of the time … series for inflation. Inflation is highly persistent, but much of that persistence is due to shifts in trend inflation. …