| Traditional Versus New Keynesian Phillips Curves: Evidence from Output Effects Contributor(s): Roeger, Werner (Author), Herz, Bernhard (Author), International Journal of Central Banking (Created by) |
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ISBN: 1249454808 ISBN-13: 9781249454809 Publisher: Bibliogov OUR PRICE: $14.01 Product Type: Paperback Published: September 2012 |
| Additional Information |
| BISAC Categories: - Political Science |
| Physical Information: 0.05" H x 7.44" W x 9.69" (0.15 lbs) 26 pages |
| Descriptions, Reviews, Etc. |
| Publisher Description: We identify a crucial difference between the backward-ooking and forward-looking Phillips curve concerning the real output effects of monetary policy shocks. The backward-ooking Phillips curve predicts a strict intertemporal trade-off in the case of monetary shocks: a positive short-run response of output is followed by a period in which output is below baseline and the cumulative output effect is exactly zero. In contrast, the forward-looking model implies a positive cumulative output effect. The empirical evidence on the cumulated output effects of money is consistent with the forward-looking model. We also use this method to determine the degree of forward-looking price setting. |
