Template-Type: ReDIF-Paper 1.0
Author-Name: Aleksejs Melihovs
Author-X-Name-First: Aleksejs
Author-X-Name-Last: Melihovs
Author-Workplace-Name: Bank of Latvia
Author-Name: Anna Zasova
Author-X-Name-First: Anna
Author-X-Name-Last: Zasova
Author-Workplace-Name: Bank of Latvia
Title: Estimation of the Phillips Curve for Latvia
Abstract: The current paper aims at estimating the formation mechanism of business inflation expectations to find out how the latter affect the inflation dynamics. To attain this goal, the authors estimated the traditional Phillips curve, new Keynesian Phillips curve and hybrid Phillips curve. The results obtained testify to a better explanatory power to describe the dynamics of Latvia's core inflation of the hybrid Phillips curve compared with the traditional and new Keynesian Phillips curves. Moreover, the outcomes of the research indicate that companies in Latvia adjust their output prices quite frequently implying that the pass-through of changes in inflation expectations to actual prices is quite prompt.
Creation-Date: 2007-07-17
File-URL: https://www.bank.lv/public_files/images/img_lb/izdevumi/english/citas/Estimation_Phillips_Curve.pdf
File-Format: Application/pdf
File-URL: https://www.macroeconomics.lv/sites/default/files/estimation_phillips_curve.pdf
File-Format: Application/pdf
Number: 2007/03
Classification-JEL: C22, E31
Keywords: Phillips curve, new Keynesian Phillips curve, hybrid Phillips curve, inflation persistence
X-File-Ref: https://repec.bank.lv/refs/wpaper200703.txt
Handle: RePEc:ltv:wpaper:200703