The Elusive Persistence: Wage and Price Rigidities, the Phillips Curve, and Inflation Dynamics

Christopher Tsoukis, George Kapetanios and Joseph Pearlman

No 619, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: We review the main New Keynesian inflation equations that have arisen as a result of aggregation from individual firms' price rigidities. We find that, on the whole, they cannot account for inflation persistence, a key feature of the empirical dynamics of inflation, and with important policy implications. The only exception seems to be when price stickiness is combined with wage rigidity and staggering.

Keywords: Inflation rigidity; Price stickiness; Phillips curve (search for similar items in EconPapers)
JEL-codes: E31 E32 (search for similar items in EconPapers)
Date: 2007-10-01
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:619

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