New Keynesian Phillips Curve

E916117

Phillips curve specification inflation dynamics model macroeconomic relationship

The New Keynesian Phillips Curve is a macroeconomic relationship that links inflation dynamics to expected future inflation and real economic activity, derived from models with nominal rigidities and forward-looking behavior.

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Observed surface forms (2)

Surface form	Occurrences
New Keynesian Phillips curve	3
New Keynesian Phillips Curve is broadly consistent with euro area data	1

Statements (49)

Predicate	Object
instanceOf	Phillips curve specification ⓘ inflation dynamics model ⓘ macroeconomic relationship ⓘ
associatedWith	Guillermo Calvo NERFINISHED ⓘ Jordi Galí NERFINISHED ⓘ Mark Gertler NERFINISHED ⓘ Michael Woodford NERFINISHED ⓘ
basedOn	New Keynesian economics NERFINISHED ⓘ
contrastsWith	accelerationist Phillips curve NERFINISHED ⓘ expectations-augmented Phillips curve ⓘ traditional backward-looking Phillips curve NERFINISHED ⓘ
coreEquation	current inflation depends on expected future inflation and real marginal cost ⓘ
derivedFrom	Calvo pricing model NERFINISHED ⓘ intertemporal optimization by firms ⓘ models with nominal price rigidities ⓘ
describes	inflation dynamics ⓘ relationship between inflation and real economic activity ⓘ
empiricalIssue	difficulty in measuring real marginal cost ⓘ slope of the Phillips curve is often estimated to be small ⓘ
field	macroeconomics ⓘ monetary economics ⓘ
hasCharacteristic	forward-looking expectations ⓘ microfoundations ⓘ nominal rigidities ⓘ rational expectations ⓘ staggered price setting ⓘ time-dependent price setting ⓘ
hasVariant	backward- and forward-looking New Keynesian Phillips Curve ⓘ hybrid New Keynesian Phillips Curve ⓘ
implies	inflation persistence can arise from structural frictions ⓘ monetary policy affects inflation via expectations ⓘ
parameter	degree of price rigidity ⓘ elasticity of substitution between differentiated goods ⓘ share of firms that cannot reset prices each period ⓘ β (subjective discount factor) ⓘ κ (slope of the Phillips curve) ⓘ
relatesTo	current inflation ⓘ expected future inflation ⓘ monetary policy transmission ⓘ output gap ⓘ real marginal cost ⓘ
timePeriod	developed in late 20th century ⓘ
typicalForm	π_t = β E_t[π_{t+1}] + κ x_t + u_t ⓘ
usedIn	New Keynesian DSGE models NERFINISHED ⓘ central bank macroeconomic models ⓘ dynamic stochastic general equilibrium models ⓘ monetary policy analysis ⓘ
usesConcept	output gap as proxy for marginal cost ⓘ real marginal cost as driving variable ⓘ

Referenced by (5)

Full triples — surface form annotated when it differs from this entity's canonical label.

The New Keynesian Phillips Curve: Time Series Evidence from the Euro Area → conclusion → New Keynesian Phillips Curve ⓘ

this entity surface form: New Keynesian Phillips Curve is broadly consistent with euro area data

The New Keynesian Phillips Curve: Time Series Evidence from the Euro Area → mainConcept → New Keynesian Phillips Curve ⓘ

Interest and Prices → mainTopic → New Keynesian Phillips Curve ⓘ

this entity surface form: New Keynesian Phillips curve

Interest and Prices: Foundations of a Theory of Monetary Policy → subject → New Keynesian Phillips Curve ⓘ

this entity surface form: New Keynesian Phillips curve

Interest and Prices: Foundations of a Theory of Monetary Policy → theoreticalBasis → New Keynesian Phillips Curve ⓘ

this entity surface form: New Keynesian Phillips curve