New Keynesian Economics and the Phillips Curve

Models with sticky prices are an important part of New Keynesian economics. I show that several of the new Keynesian models imply a formulation that is similar to the expectations-augmented Phillips curve of Milton Friedman and Edmund Phelps. I then present new estimates of the New Keynesian Phillips curve. I use two proxies for price expectations: survey-based measures and an econometric-based measure originally developed by Bennett McCallum. Overall, the results are consistent with the model, but the survey-based results are more precise, suggesting that the surveys may be better measures of actual expectation.

Английский

Journal of Money, Credit and Banking. – Vol. 27, № 4. – P. 975–984.