New Keynesian Endogenous Stabilization in a Panel of Countries
In the new Keynesian model of endogenous stabilization governments have objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve. We develop an econometric characterization of the political-economic equilibrium using the Kalman filter to model the unob...
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ftrepec:oai:RePEc:uta:papers:2008_19 2023-05-15T17:31:15+02:00 New Keynesian Endogenous Stabilization in a Panel of Countries David Kiefer http://economics.utah.edu/research/publications/2008_19.pdf unknown http://economics.utah.edu/research/publications/2008_19.pdf preprint ftrepec 2020-12-04T13:43:34Z In the new Keynesian model of endogenous stabilization governments have objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve. We develop an econometric characterization of the political-economic equilibrium using the Kalman filter to model the unobserved natural rate. Applying this methodology to a panel of North Atlantic countries, we find it consistent with history with a few qualifications. For one, governments are more likely to target growth rates, than output gaps. And, inflation expectations are more likely adaptive, than rational. Also, the error restrictions implied by the standard inflation-productivity shocks formulation needs to be relaxed. endogenous stabilization, objectives, expectations, Kalman filtering Report North Atlantic RePEc (Research Papers in Economics) |
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In the new Keynesian model of endogenous stabilization governments have objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve. We develop an econometric characterization of the political-economic equilibrium using the Kalman filter to model the unobserved natural rate. Applying this methodology to a panel of North Atlantic countries, we find it consistent with history with a few qualifications. For one, governments are more likely to target growth rates, than output gaps. And, inflation expectations are more likely adaptive, than rational. Also, the error restrictions implied by the standard inflation-productivity shocks formulation needs to be relaxed. endogenous stabilization, objectives, expectations, Kalman filtering |
format |
Report |
author |
David Kiefer |
spellingShingle |
David Kiefer New Keynesian Endogenous Stabilization in a Panel of Countries |
author_facet |
David Kiefer |
author_sort |
David Kiefer |
title |
New Keynesian Endogenous Stabilization in a Panel of Countries |
title_short |
New Keynesian Endogenous Stabilization in a Panel of Countries |
title_full |
New Keynesian Endogenous Stabilization in a Panel of Countries |
title_fullStr |
New Keynesian Endogenous Stabilization in a Panel of Countries |
title_full_unstemmed |
New Keynesian Endogenous Stabilization in a Panel of Countries |
title_sort |
new keynesian endogenous stabilization in a panel of countries |
url |
http://economics.utah.edu/research/publications/2008_19.pdf |
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North Atlantic |
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North Atlantic |
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http://economics.utah.edu/research/publications/2008_19.pdf |
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1766128742245072896 |