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Author: Syed Kanwar Abbas
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study estimates the new Keynesian Phillips curve (NKPC) of Gali and Monacelli for a small open economy using Australian data. Our detailed investigation hinges on estimating the structural parameters in five different variants of the Gali-Monacelli NKPC, which relates the inflation process to terms of trade and the real exchange rate; the marginal cost and output gap as proxies for real economic activity and the hybrid version incorporating both forward- and backward-looking inflation expectations. The analysis and extensive robustness checks overwhelmingly establish that the Gali-Monacelli NKPC cannot explain the dynamics of inflation and is rejected by the Australian data.
Author: Syed Kanwar Abbas
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This study estimates the new Keynesian Phillips curve (NKPC) of Gali and Monacelli for a small open economy using Australian data. Our detailed investigation hinges on estimating the structural parameters in five different variants of the Gali-Monacelli NKPC, which relates the inflation process to terms of trade and the real exchange rate; the marginal cost and output gap as proxies for real economic activity and the hybrid version incorporating both forward- and backward-looking inflation expectations. The analysis and extensive robustness checks overwhelmingly establish that the Gali-Monacelli NKPC cannot explain the dynamics of inflation and is rejected by the Australian data.
Author: Pål Boug
Publisher:
ISBN:
Category :
Languages : en
Pages : 38
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Book Description
Author: Assaf Razin
Publisher:
ISBN:
Category : Capital market
Languages : en
Pages : 28
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Book Description
The paper extends Woodford's (2000) analysis of the closed economy Phillips curve to an open economy with both commodity trade and capital mobility. We show that consumption smoothing, which comes with the opening of the capital market, raises the degree of strategic complementarity among monopolistically competitive suppliers, thus rendering prices more sticky and magnifying output responses to nominal GDP shocks.
Author: Alexander Mihailov
Publisher:
ISBN:
Category : Free trade
Languages : en
Pages : 25
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Book Description
This paper applies GMM estimation to assess empirically the small open-economy New Keynesian Phillips Curve derived in Galí and Monacelli (2005). We obtain a testable specification where fluctuations in the terms of trade enter explicitly, thus allowing a comparison of the relevance of domestic versus external determinants of CPI inflation dynamics. For most countries in our sample the expected relative change in the terms of trade emerges as a more relevant inflation driver than the contemporaneous domestic output gap. Overall, our results indicate some, albeit moderate, support for the tested relationship based on data from ten OECD countries typically classified as open economies.
Author: Karolina Holmberg
Publisher:
ISBN:
Category :
Languages : en
Pages : 27
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Book Description
In recent years, it has become increasingly common to estimate New Keynesian Phillips curves with a measure of firms' real marginal cost as the real driving variable. It has been argued that this measure is both theoretically and empirically superior to the traditional output gap. In this paper, a marginal-cost based New Keynesian Phillips curve is estimated on Swedish data by means of GMM and Full Information Maximum Likelihood. The results show that with real marginal cost in the structural equation the point estimates generally have the exptected positive sign, which is less frequently the case using the output gap in the Phillips curve equation. This suggests that real marginal cost might be a more adequate real explanatory variable for Swedish inflation than the output gap. However, standard errors in the estimations are large and it is in fact difficult to pin down a statistically significant relationship between either real marginal cost or the output gap and inflation.
Author: Alon Binyamini
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 43
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Book Description
Author: Juan Carlos Aquinoy
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ISBN:
Category :
Languages : en
Pages :
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Author: Marcos Antonio Coutinho da Silveira
Publisher:
ISBN:
Category : Econometric models
Languages : en
Pages : 60
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Book Description
Author: Þorvarður Tjörvi Ólafsson
Publisher:
ISBN:
Category : Keynesian economics
Languages : en
Pages : 77
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Book Description
Author: Philippe D Karam
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 28
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Book Description
We extend a small New Keynesian structural model used for monetary policy analysis to address a richer class of policy issues that arise in open economy analysis. We draw a distinction between absorption and domestic output, and as the difference between the two is effectively the current account, there is now an explicit accumulation or decumulation of foreign liabilities in response to various shocks affecting the system. Such stock equilibria can now have an impact back on to the flows in the domestic economy. We perform simulations using parameters calibrated to the Canadian economy and compare the differences in impulse responses from the original model. Advantages in a forecasting environment owing to the ability to impose explicit projections about imports and exports are also exposed.
