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• W4230231787 abstract "The canonical inflation specification in sticky-price rational expectations models (the new-Keynesian Phillips curve) is often criticized on the grounds that it fails to account for the dependence of inflation on its own lags. In response, many recent studies have employed a &quot;hybrid&quot; sticky-price specification in which inflation depends on a weighted average of lagged and expected future values of itself, in addition to a driving variable such as the output gap. In this paper, we consider some simple tests of the hybrid model that are derived from the model&#x27;s closed-form solution. Our results suggest that the hybrid model provides a poor description of empirical inflation dynamics, and that there is little evidence of the type of rational forward-looking behavior implied by the model." @default.
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• W4230231787 date "2003-01-01" @default.
• W4230231787 modified "2023-09-26" @default.
• W4230231787 title "Can Rational Expectations Sticky-Price Models Explain Inflation Dynamics?" @default.
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• W4230231787 doi "https://doi.org/10.17016/feds.2003.46" @default.
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