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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18372Full metadata record
| DC Field | Value | Language |
|---|---|---|
| dc.creator | Gottschalk, Jan | - |
| dc.creator | Fritsche, Ulrich | - |
| dc.date | 2005 | - |
| dc.date.accessioned | 2013-10-16T06:59:40Z | - |
| dc.date.available | 2013-10-16T06:59:40Z | - |
| dc.date.issued | 2013-10-16 | - |
| dc.identifier | http://hdl.handle.net/10419/18372 | - |
| dc.identifier | ppn:504313746 | - |
| dc.identifier.uri | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18372 | - |
| dc.description | New-Keynesian macroeconomic models typically assume that any long-run trade-off between inflation and unemployment is ruled out. While this appears to be a reasonable characterization of the US economy, it is less clear that the natural rate hypothesis necessarily holds in a European country like Germany where hysteretic effects may invalidate it. Inspired by the framework developed by Farmer (2000) and Beyer and Farmer (2002), we investigate the long-run relationships between the interest rate, unemployment and inflation in West Germany from the early 1960s up to 2004 using a multivariate cointegration analysis technique. The results point to a structural break in the late 1970s. In the later time period we find for West German data a strong negative correlation between the trend components of inflation and unemployment. We show that this finding contradicts the natural rate hypothesis, introduce a version of the New Keynesian model which allows for some hysteresis and compare the effectiveness of monetary policy in these two models. In general, a policy rule with an aggressive response to a rise in unemployment performs better in a model with hysteretic characteristics than in a model without. | - |
| dc.language | eng | - |
| dc.publisher | Deutsches Institut für Wirtschaftsforschung (DIW) Berlin | - |
| dc.relation | DIW-Diskussionspapiere 521 | - |
| dc.rights | http://www.econstor.eu/dspace/Nutzungsbedingungen | - |
| dc.subject | C32 | - |
| dc.subject | B22 | - |
| dc.subject | E24 | - |
| dc.subject | ddc:330 | - |
| dc.subject | Cointegration | - |
| dc.subject | Vector Error CorrectionModel | - |
| dc.subject | Unemployment | - |
| dc.subject | Phillips Curve | - |
| dc.subject | Hysteresis | - |
| dc.title | The New Keynesian Model and the Long-Run Vertical Phillips Curve: Does It Hold for Germany? | - |
| dc.type | doc-type:workingPaper | - |
| Appears in Collections: | EconStor | |
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