کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
5053248 | 1476506 | 2017 | 15 صفحه PDF | دانلود رایگان |
- Analysis of stability of the hybrid NKPC in an emerging economy at low inflation.
- The NKPC flattens for both core and headline inflation.
- Underutilization of labour during low inflation partly explains this phenomenon.
- Stabilizing inflation requires much larger output movements.
- A structural approach is required to isolate the drivers of these changes.
The flattening of the Phillips curve is a vigorously investigated phenomenon in many advanced economies. Still little evidence has been presented for emerging, small open economies facing persistently low inflation. In this paper I address this issue through rigorous estimation of a substantial number of stylized, open-economy hybrid new Keynesian Phillips curves for Poland. I find robust evidence of the flattening of the Phillips curve and the rising impact of external factors for both headline and core inflation. I conclude that during excessive disinflation in Poland the flattening of the Phillips curve can be partly explained by the underutilization of labour, whereas the stronger impact of global factors on core inflation suggests strengthening indirect effects. The changes in the estimated parameters indicate that the macroeconomic cost of bringing inflation back to the desired target has increased. Further identification of the reasons behind the flattening of the Phillips curve in an emerging, small open economy should provide useful insights for monetary policy.
Journal: Economic Modelling - Volume 63, June 2017, Pages 334-348