Petrella, Ivan and Santoro, Emiliano (2012) Inflation dynamics and real marginal costs : new evidence from U.S. manufacturing industries. Journal of Economic Dynamics and Control, 36 (5). pp. 779-794. doi:10.1016/j.jedc.2012.01.009 ISSN 0165-1889.

Research output not available from this repository.

Request-a-Copy directly from author or use local Library Get it For Me service.

Request Changes to record.

Abstract

This paper deals with the analysis of price-setting in U.S. manufacturing industries. Recent studies have heavily criticized the ability of the New Keynesian Phillips curve (NKPC) to fit aggregate inflation (see, e.g., Rudd and Whelan, 2006). We challenge this evidence, showing that forward-looking behavior as implied by the New Keynesian model of price-setting is widely supported at the sectoral level. In fact, current and expected future values of the income share of intermediate goods emerge as an effective driver of inflation dynamics. Unlike alternative proxies for the forcing variable, the cost of intermediate goods presents dynamic properties in line with the predictions of the New Keynesian theory.

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Journal of Economic Dynamics and Control
Publisher:	Elsevier BV
ISSN:	0165-1889
Official Date:	May 2012
Dates:	Date Event May 2012 Published 31 January 2012 Available 27 December 2011 Accepted
Volume:	36
Number:	5
Page Range:	pp. 779-794
DOI:	10.1016/j.jedc.2012.01.009
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

Request changes or add full text files to a record

Repository staff actions (login required)

View Item