Please use this identifier to cite or link to this item:
https://hdl.handle.net/2440/108841
Citations | ||
Scopus | Web of Science® | Altmetric |
---|---|---|
?
|
?
|
Type: | Journal article |
Title: | Deep habits in the New Keynesian Phillips Curve |
Author: | Lubik, T. Teo, W. |
Citation: | Journal of Money, Credit and Banking, 2014; 46(1):79-114 |
Publisher: | Ohio State University Press |
Issue Date: | 2014 |
ISSN: | 0022-2879 1538-4616 |
Statement of Responsibility: | Homas A. Lubik, Wing Leong Teo |
Abstract: | We derive and estimate a New Keynesian Phillips Curve (NKPC) in a model with deep habits. Habits are deep in that they apply to individual consumption goods instead of aggregate consumption. This alters the NKPC in a fundamental manner since it introduces consumption growth and future demand terms into the NKPC equation. We construct the driving process in the deep habits NKPC by using the model’s optimality conditions to impute time series for unobservable variables. The resulting series is considerably more volatile than unit labor cost. Generalized methods of moments estimation shows an improved fit and a much lower degree of indexation compared to the standard NKPC. |
Keywords: | Phillips curve; GMM; marginal costs; deep habits |
Rights: | © 2014 Federal Reserve Bank of Richmond |
DOI: | 10.1111/jmcb.12098 |
Published version: | http://dx.doi.org/10.1111/jmcb.12098 |
Appears in Collections: | Aurora harvest 3 Economics publications |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
RA_hdl_108841.pdf Restricted Access | Restricted Access | 399.49 kB | Adobe PDF | View/Open |
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.