Search

We estimate the Sticky Information Phillips Curve model of Mankiw and Reis (2002) using survey expectations of professional forecasters from four major European economies. Our estimates imply that inflation expectations in France, Germany, and the United Kingdom are updated about once a year, while in Italy, about once each 6 months. JEL codes: D84, E31 Keywords: inflation expectations, sticky information, Phillips curve, inflation persistence., FORMATION OF EXPECTATIONS, information transmission, and learning have recently again attracted much interest. (1) Several new papers, including Mankiw and Reis (2002, 2003, 2006), argue that models in which agents [...]

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-6435.2007.00376.x Byline: Jonas Dovern (1), Peter Nunnenkamp (1) Abstract: SUMMARY The paper applies an alternative approach to assess whether foreign aid promotes economic growth in developing countries, based on the concept of temporary growth accelerations suggested by Hausmann, Pritchett and Rodrik. In addition to aggregate aid, we differentiate between major aid categories, including grants, loans and so-called short-impact aid. It turns out that aid flows have a small but significantly positive effect on the conditional probability of growth accelerations. This result holds across different estimation methods. However, the significance of results crucially depends on the criteria applied to identify growth accelerations. Author Affiliation: (1)Kiel Institute for the World Economy, Duesternbrooker Weg 120, D-24105 Kiel, Germany