Inflation dynamics and the New Keynesian Phillips curve in EU-4

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Title:	Inflation dynamics and the New Keynesian Phillips curve in EU-4
Author:	Vasicek, Borek; Universitat Autònoma de Barcelona. Departament d'Economia Aplicada
Abstract:	The paper seeks to shed light on inflation dynamics of four new EU member states: the Czech Republic, Hungary, Poland and Slovakia. To this end, the New Keynesian Phillips curve augmented for open economies is estimated and additional statistical tests applied. We find the following. (1) The claim of New Keynesians that the real marginal cost is the main inflation-forcing variable is fragile. (2) Inflation seems to be driven by external factors. (3) Although inflation holds a forward-looking component, the backward-looking component is substantial. An intuitive explanation for higher inflation persistence may be rather adaptive than rational price setting of local firms.
Subject(s):	-Inflació (Finances) Polònia -Inflació (Finances) República Txeca -Inflació (Finances) Hongria -Inflació (Finances) Eslovàquia
Rights:	open access Aquest document està subjecte a una llicència d'ús de Creative Commons, amb la qual es permet copiar, distribuir i comunicar públicament l'obra sempre que se'n citin l'autor original, la universitat i el departament i no se'n faci cap ús comercial ni obra derivada, tal com queda estipulat en la llicència d'ús https://creativecommons.org/licenses/by-nc-nd/2.5/
Document type:	Working paper
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Uri:	https://ddd.uab.cat/record/60954