Can the New Keynesian Phillips Curve Explain Inflation Gap Persistence?

Fang Yao
Whelan (2007) found that the generalized Calvo-sticky-price model fails to replicate a typical feature of the empirical reduced-form Phillips curve - the positive dependence of inflation on its own lags. In this paper, I show hat it is the 4-period-Taylor-contract hazard function he chose that gives rise to this result. In contrast, an empirically-based aggregate price reset hazard function can generate simulated data that are consistent with inflation gap persistence found in US CPI data....
This data repository is not currently reporting usage information. For information on how your repository can submit usage information, please see our documentation.