Abstract
We find that measures of the distribution of relative price changes are significant when included in a standard model of the UK Phillips curve based on time dependent price adjustment. Since the inclusion of these variables is not implied by this model but is implied by a state-dependent model of price adjustment or by a time-dependent model with allowance for heterogeneity among price-setters, we conclude that the familiar time-dependent model does not provide a complete account of the Phillips curve.
| Original language | English |
|---|---|
| Pages (from-to) | 1737-1744 |
| Number of pages | 7 |
| Journal | Economics Bulletin |
| Volume | 30 |
| Issue number | 3 |
| Publication status | Published - 11 Jul 2010 |
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)