TITLE

Inflation Dynamics and the New Keynesian Phillips Curve

AUTHOR(S)
SILL, KEITH
PUB. DATE
March 2011
SOURCE
Business Review (Federal Reserve Bank of Philadelphia);2011 First Quarter, p17
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
The article examines the New Keynesian Phillips curve theory to determine inflation and implications for the conduct of monetary policy in the U.S. It notes the importance of low and stable inflation as a goal of policymakers, citing a 1977 amendment to the U.S. Federal Reserve Act that promotes the goal of moderate long-term interest rates. It describes the use of the original Phillips curve model on historical inflation and employment data, the perceived weakness of the model, and the features, imperfect competition and sticky prices, of the new model.
ACCESSION #
60496844

 

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