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Optimising microfoundations for inflation persistence

Abstract:

Much recent monetary policy literature has searched for structural models suitable for policy analysis that are both based on optimising microfoundations and consistent with the data, especially observed persistence in inflation and output. Few models do well on both criteria. We derive an optimising model of the Phillips curve based on a generalised time dependent pricing rule, calibrate it using microeconomic evidence on price changing behaviour and simulate it with a standard discretionary...

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Publication status:
Published

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Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2004-01-01
Paper number:
183
Keywords:
Pubs id:
1144254
Local pid:
pubs:1144254
Deposit date:
2020-12-15

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