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New estimates of the hybrid US Phillips curve

Authors
Publication Date
Keywords
  • E32 - Business Fluctuations
  • Cycles
  • E31 - Price Level
  • Inflation
  • Deflation
Disciplines
  • Mathematics

Abstract

This paper examines the validity of Rudd and Whelan’s (2006) critiques of Gali and Gertler’s (1999) hybrid Phillips curve (HYPC) by re-estimating the HYPC using full information maximum likelihood (FIML). We also estimate HYPC with the constraint that the weights for the sum of forward looking and backward looking expectations should be unity. Our results support Rudd and Whelan’s conclusion that the weight for forward looking expectations is insignificant.

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