The New Keynesian Phillips Curve in a Small Open Economy: Empirical Evidence from Australia.

• Autores: Syed Kanwar Abbas, Prasad Sankar Bhattacharya, Debdulal Mallick, Pasquale M. Sgro
• Localización: Economic record, ISSN 0013-0249, Vol. 92, Nº. 298, 2016, págs. 409-434
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • This study estimates the new Keynesian Phillips curve ( NKPC) of Gali and Monacelli for a small open economy using Australian data. Our detailed investigation hinges on estimating the structural parameters in five different variants of the Gali-Monacelli NKPC, which relates the inflation process to terms of trade and the real exchange rate; the marginal cost and output gap as proxies for real economic activity and the hybrid version incorporating both forward- and backward-looking inflation expectations. The analysis and extensive robustness checks overwhelmingly establish that the Gali-Monacelli NKPC cannot explain the dynamics of inflation and is rejected by the Australian data.