Author: Enrique Martinez-GarciaPublisher: DIANE Publishing
ISBN: 143798066X
Category : Business & Economics
Languages : en
Pages : 37
Book Description
Illustrates the analytical content of the global slack hypothesis in the context of variant of the New Open-Economy Macro model under the assumptions of both producer currency pricing and local currency. The model predicts that the Phillips curve for domestic CPI inflation will be flatter under most plausible parameterizations, the more important international trade is to the domestic economy. The model also predicts that foreign output gaps will matter for inflation dynamics, along with the domestic output gap. When the Phillips curve includes the terms of trade gap rather than the foreign output gap, the response of domestic inflation to the domestic output gap is the same as in the closed-economy case ¿ceteris paribus.¿ This is a print on demand report.
