inflation dynamics

The Phillips Curve Under State-Dependent Pricing

JEL codes: 
E31, E32
Version Date: 
Oct 2006

This article is related to the large recent literature on Phillips curves in sticky- price equilibrium models. It differs in allowing for the degree of price stickiness to be determined endogenously. A closed-form solution for short-term inflation is derived from the dynamic stochastic general equilibrium (DSGE) model with state-dependent pricing developed by Dotsey, King and Wolman.

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