A central proposition in the Phillips curve view of the inflation process is that prices are marked up over productivity-adjusted labor costs. If that is true, then long-run movements in prices and labor costs must be correlated. If long-run movements in a time series are modeled as a stochastic...

In order to investigate the potential anti-inflationary consequences of acceleration of productivity, the output gap-based Phillips curve is augmented to include the cyclical markup and change in output gap. The markup allows for the short-term influence of productivity-induced decline in unit...

The empirical test of the output gap-based New Keynesian Phillips curve often has been implemented by estimating a hybrid specification that includes both lagged and future inflation and then by examining whether the estimated coefficient on future inflation is significantly larger than the one...