A New Keynesian Phillips Curve With Staggered Contracts and Indexation

Musy, Olivier (2020): A New Keynesian Phillips Curve With Staggered Contracts and Indexation.

Abstract

We develop a New Keynesian Phillips curve based on a combination of staggered price contracts and indexation to past inflation. This Phillips curve links current inflation dynamics to past inflation with a positive weight, as well as current and lagged expectations of inflation and output, giving a possible alternative explanation for recent empirical findings on the role of expectations in the determination of inflation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inflation Dynamics, Staggered contracts, Price Indexation, Sticky Prices, New Keynesian Phillips Curve, Sticky Expectations
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

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