Modeling inflation dynamics : a critical review of recent research

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Title: Modeling inflation dynamics : a critical review of recent research
Authors: Rudd, Jeremy
Whelan, Karl
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Date: Feb-2007
Online since: 2008-06-05T15:51:51Z
Abstract: In recent years, a broad academic consensus has arisen that favors using rational expectations sticky-price models to capture inflation dynamics. We review the principal conclusions of this literature concerning: (1) the ability of these models to fit the data; (2) the importance of rational forward-looking expectations in price setting; and (3) the appropriate measure of inflationary pressures. We argue that existing models fail to provide a useful empirical description of the inflation process.
Type of material: Journal Article
Publisher: Blackwell
Journal: Journal of Money, Credit and Banking
Volume: 39
Issue: s1
Start page: 155
End page: 170
Copyright (published version): Copyright 2007 The Ohio State University
Keywords: Phillips curveSticky pricesRational expectations
Subject LCSH: Inflation (Finance)--Mathematical models
Rational expectations (Economic theory)
DOI: 10.1111/j.1538-4616.2007.00019.x
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Language: en
Status of Item: Peer reviewed
Appears in Collections:Economics Research Collection

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