Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve

DSpace/Manakin Repository

Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve

Citable link to this page

 

 
Title: Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve
Author: Mavroeidis, Sophocles; Plagborg-Moller, Mikkel; Stock, James H.

Note: Order does not necessarily reflect citation order of authors.

Citation: Mavroeidis, Sophocles, Mikkel Plagborg-Møller, and James H. Stock. 2014. Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve. Journal of Economic Literature 52, no. 1: 124–188.
Full Text & Related Files:
Abstract: We review the main identification strategies and empirical evidence on the role of expectations in the New Keynesian Phillips curve, paying particular attention to the issue of weak identification. Our goal is to provide a clear understanding of the role of expectations that integrates across the different papers and specifications in the literature. We discuss the properties of the various limited-information econometric methods used in the literature and provide explanations of why they produce conflicting results. Using a common dataset and a flexible empirical approach, we find that researchers are faced with substantial specification uncertainty, as different combinations of various a priori reasonable specification choices give rise to a vast set of point estimates. Moreover, given a specification, estimation is subject to considerable sampling uncertainty due to weak identification. We highlight the assumptions that seem to matter most for identification and the configuration of point estimates. We conclude that the literature has reached a limit on how much can be learned about the New Keynesian Phillips curve from aggregate macroeconomic time series. New identification approaches and new datasets are needed to reach an empirical consensus.
Published Version: doi:10.1257/jel.52.1.124
Other Sources: http://scholar.harvard.edu/files/plagborg/files/infl_expns_nkpc_mps.pdf
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:22795845
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)

 
 

Search DASH


Advanced Search
 
 

Submitters