New Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy Delegation
We analyze the microfoundations of the Phillips curve and the close links between that relationship and results concerning optimal monetary policy, stabilisation bias and monetary policy delegation. Most recent literature has used a New Keynesian Phillips Curve based on Calvo pricing, often with an...
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| Natura: | Working paper |
| Lingua: | English |
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Department of Economics (University of Oxford)
2003
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| _version_ | 1826306924873777152 |
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| author | Mash, R |
| author_facet | Mash, R |
| author_sort | Mash, R |
| collection | OXFORD |
| description | We analyze the microfoundations of the Phillips curve and the close links between that relationship and results concerning optimal monetary policy, stabilisation bias and monetary policy delegation. Most recent literature has used a New Keynesian Phillips Curve based on Calvo pricing, often with an additional lagged inflation term motivated by rule-of-thumb behaviour. We develop a framework which encompasses this workhorse model while allowing for a richer time dependent pricing rule. This permits a more general analysis while showing that the standard model and policy conclusions derived from it are not robust to relatively minor changes in its microfoundations. |
| first_indexed | 2024-03-07T06:55:18Z |
| format | Working paper |
| id | oxford-uuid:fdf1cce0-a24c-4108-8285-aee30d244fb6 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T06:55:18Z |
| publishDate | 2003 |
| publisher | Department of Economics (University of Oxford) |
| record_format | dspace |
| spelling | oxford-uuid:fdf1cce0-a24c-4108-8285-aee30d244fb62022-03-27T13:32:31ZNew Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy DelegationWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:fdf1cce0-a24c-4108-8285-aee30d244fb6EnglishOxford University Research Archive - ValetDepartment of Economics (University of Oxford)2003Mash, RWe analyze the microfoundations of the Phillips curve and the close links between that relationship and results concerning optimal monetary policy, stabilisation bias and monetary policy delegation. Most recent literature has used a New Keynesian Phillips Curve based on Calvo pricing, often with an additional lagged inflation term motivated by rule-of-thumb behaviour. We develop a framework which encompasses this workhorse model while allowing for a richer time dependent pricing rule. This permits a more general analysis while showing that the standard model and policy conclusions derived from it are not robust to relatively minor changes in its microfoundations. |
| spellingShingle | Mash, R New Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy Delegation |
| title | New Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy Delegation |
| title_full | New Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy Delegation |
| title_fullStr | New Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy Delegation |
| title_full_unstemmed | New Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy Delegation |
| title_short | New Keynesian Microfoundations Revisited: A Calvo-Taylor-Rule-of-Thumb Model and Optimal Monetary Policy Delegation |
| title_sort | new keynesian microfoundations revisited a calvo taylor rule of thumb model and optimal monetary policy delegation |
| work_keys_str_mv | AT mashr newkeynesianmicrofoundationsrevisitedacalvotaylorruleofthumbmodelandoptimalmonetarypolicydelegation |