ESTIMATING A NEW KEYNESIAN PHILLIPS CURVE WITH A CORRECTED MEASURE OF REAL MARGINAL COST: EVIDENCE IN JAPAN
We estimate a New Keynesian Phillips curve (NKPC) in Japan, focusing on the measurement of real marginal cost (RMC). Especially, we correct labor share by taking account of two kinds of labor market frictions: (1) labor adjustment costs and (2) real wage rigidity. Our results show that the considera...
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| Veröffentlicht in: | Economic inquiry 2009-10, Vol.47 (4), p.667-684 |
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| creator | MUTO, ICHIRO |
| description | We estimate a New Keynesian Phillips curve (NKPC) in Japan, focusing on the measurement of real marginal cost (RMC). Especially, we correct labor share by taking account of two kinds of labor market frictions: (1) labor adjustment costs and (2) real wage rigidity. Our results show that the consideration of these labor market frictions greatly improves the fit of Japan’s NKPC. Furthermore, if we additionally incorporate materials prices in the calculation of RMC then the fit of the NKPC is further improved. The conventional backward‐looking component is no more needed to explain Japan’s inflation dynamics if we use a corrected measure of RMC. (JEL E31) |
| doi_str_mv | 10.1111/j.1465-7295.2008.00180.x |
| format | Article |
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| ispartof | Economic inquiry, 2009-10, Vol.47 (4), p.667-684 |
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| source | RePEc; Wiley Online Library Journals Frontfile Complete |
| subjects | Adjustment costs Analysis Cost estimates Diffusion index Employment Eurozone Forecasts and trends Generalized method of moments Inflation Inflation (Finance) Inflation rates Japan Keynesian theory Labor costs Labor market Marginal costs Model testing Monetary economics Monetary equilibrium Monopolistic competition Neokeynesianism Phillips curve Prices Sticky wages Studies |
| title | ESTIMATING A NEW KEYNESIAN PHILLIPS CURVE WITH A CORRECTED MEASURE OF REAL MARGINAL COST: EVIDENCE IN JAPAN |
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