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En este estudio se analiza la dinámica reciente de la inflación brasileña considerando distintas hipótesis de expectativas para observar la manera en que un posible comportamiento discrecional de la autoridad monetaria puede interferir en las expectativas con miras al futuro de los agentes y la forma en que esa interferencia puede afectar la respuesta de la inflación a su componente inercial y a las oscilaciones en los ciclos económicos en el marco de la curva de Phillips neokeynesiana. Para ello se realizan estimaciones de dicha curva y de su versión híbrida con el método generalizado de momentos (MGM) consistente en presencia de heterocedasticidad y autocorrelación. Los resultados sugieren que, en una hipótesis de menor previsibilidad de los agentes, la inflación será más sensible a las oscilaciones en los ciclos económicos cuanto mayor sea su componente inercial. [ABSTRACT FROM AUTHOR]

Increasing evidence shows that in the aftermath of the global financial crisis, in the euro area, the relationship between price inflation and economic slack became stronger. Instead, there is no clear evidence of a strong(er) relationship between wage inflation and unemployment. In this paper, we estimate a Phillips curve with time-varying coefficients separately for Italy, Spain, Germany and France and we find that, with the exception of Germany, after the global financial crisis, the sensitivity of hourly wage changes to labour market slack increased. Second, by the use of administrative microdata, available only for Italy, we relate daily wage changes to the local unemployment rate. The results confirm the steepening of the Phillips curve after 2008, also when controlling for composition effects. [ABSTRACT FROM AUTHOR]

An improved Lorenz chaotic system is proposed, making it into a circuit which is easy to be implemented by using some basic electronic components. The antisynchronization error systems can be asymptotically stabilized at the origin with three different methods which are proposed to control the improved Lorenz system. Theoretical analyses and simulation results are given to demonstrate the feasibility and effectiveness of these proposed schemes. Then the hardware circuit for the proposed Lorenz system is implemented by repeated optimization design. Experimental results show that the circuit has good comprehensive performance. [ABSTRACT FROM AUTHOR]

Harry Johnson's 1971 ideas about the factors affecting the success of the Keynesian Revolution and the Monetarist Counter-revolution are summarised and extended to the analysis of the Rational Expectations-New Classical (RE-NC) Revolution. It is then argued that whereas Monetarism brought about a revival of the quantity theory of money from the limbo into which Keynesianism had pushed it, RE-NC modelling was responsible for that theory's most recent disappearance. This happened despite the fact that, initially, RE-NC economics appeared to be a mainly technical extension and refinement of Monetarism, rather than a radically new economic doctrine. Some implications of this story for todays’ macroeconomics are briefly discussed. [ABSTRACT FROM PUBLISHER]

This paper investigates the interpretation of the Phillips curve by Phillips himself. It will be shown that Phillips primarily understood his curve as a disequilibrium relation to be used in his models on stabilisation policies and not necessarily as a long-run ‘menu of choice’ between inflation and unemployment, even though Phillips did not oppose and sometimes even appears to have endorsed this interpretation. Inflation expectations are discussed by Phillips as well. Contrary to Friedman, price expectations drive his system from the demand side but not from the supply side of the economy. Nonetheless, price expectations may induce dynamic instability. [ABSTRACT FROM PUBLISHER]

The article examines the role of inflation expectations as a driver of inflation and the role of downward nominal wage rigidity as a buffer to decline inflation. The authors investigate the influence of the expectations using Phillips curve that explore the relationship among core inflation, inflation expectations, the output gap, marginal cost, and important relative price shifts. They analyze the experience of Japan to predict the future course of U.S. inflation.

This paper compares the performance of inflation and welfare loss between exchange-rate-targeting and monetary-aggregate-targeting regimes for a small-open economy characterized by a rational expectations model of the Phillips curve. We also consider rules-versus-discretion in policy. We obtain three interesting results. First, both regimes result in the same target rate of inflation and the smallest long-run welfare loss, if an active contingent rule is credibly followed. Second, when discretion is undertaken, an exchange-rate-targeting policy is always superior to a monetary-aggregate-targeting one. Third, for a simple fixed rule, Friedman-type's monetary-aggregate-targeting policy works better than exchange-rate-targeting only under specific circumstances. [ABSTRACT FROM AUTHOR]

The main objective of this investigation is to estimate an Expectations Augmented Phillips Curve function with the error correction mechanism, applying the Engle & Granger's two step method. In this occasion, the model is estimated with quarterly data, for the period 1981.01 to 2005.04, with an econometric technique that restricts the long run behaviour of the endogenous variable to converge to their co integrating relationships (static) while allowing for short run adjustment dynamics. The main results allow us to infer that more than 90% of the domestic inflation rate's behaviour is explained as a function of the nominal devaluation rate, the external inflation rate, the output gap and the lagged domestic inflation rate. [ABSTRACT FROM AUTHOR]

Should stabilization policy be a macroeconomic priority? Most central banks consider it a goal, but Robert Lucas has contended that policies to stabilize output, even if effective, yield negligible welfare gains. This article critiques Lucas's argument. Existing literature suggests nontrivial benefits from stabilization due to nonlinearity of the social welfare function and of the short-run Phillips curve. Our analysis and examination of the evidence from periods of prolonged high unemployment also suggest further significant gains to stabilization since the "accelerationist" hypothesis does not seem to hold in times of very low inflation. [ABSTRACT FROM AUTHOR]

Abstract: We study expectations coordination on a deterministic cycle of period 2 by an eductive approach in which agents are concerned with forecasting the forecasts of others. This approach is grounded in some Common Knowledge assumptions. We use this approach to discuss the problem of equilibrium selection between the stationary state and a cycle of period 2. We prove that locally eductively stable cycles of period 2 can exist if agents have stationary beliefs. [Copyright &y& Elsevier]

Abstract: Over-optimism plays an important role in behavioral economics. This study cautions that optimistic biases found in studies based on qualitative survey data may be an artifact of the method of quantification of tendency survey responses. In the literature, findings of upward biased expectations have been reported for several variables and notably for selling prices in various countries. The model proposed here explains this regularity on the basis of firms making correct probability assessments in the face of the restriction of having to report qualitative answers. Econometric estimates show that the hypothesis of unbiased expectations is upheld in a majority of cases. [Copyright &y& Elsevier]

When progress in applied research slows because opposing coalitions of investigators privilege their favored models, methodologists can contribute by addressing a tractable unresolved question that is relevant to all competing positions. In this article, the literature on educational attainment is addressed, broadly by focusing on alternative positions on the need to model students' own beliefs and more narrowly by attempting to answer a classic question that emerged in debates over the power of status attainment approaches: Why is the relationship between educational expectations and subsequent educational attainment weaker for Blacks than for Whites? Five complementary models of the causal effect of expectations on attainment are offered: a traditional path model, an average effects instrumental variable model, a countetfactual analysis of bounds, a rational expectations forecasting model, and a panel data model at updated expectations. [ABSTRACT FROM AUTHOR]

The article comments on the article "A New Line on the Phillips Curve," by Marina J. Malinov and Paul M. Sommers (MS), published in a 1997 issue of "Social Science Quarterly." Recently, Malinov and Sommers examined the relationship between inflation and unemployment in nineteen countries. Only for Switzerland and the U.S. did they find no evidence to support a Phillips curve tradeoff. Three criticisms of the MS paper stand out. First, having only twenty annual observations makes the results questionable. Problems such as inconsistency of estimated coefficients may result from such a small sample size. Second, despite several references to the stability of the relationship, MS do not perform any formal test of model stability. Third, they did not consider the time-series properties of the data.

The article presents an empirical study on the relationship between inflation and unemployment in the U.S. Until the end of the 1960s, the simple Phillips curve tradeoff between unemployment and inflation "fit like a glove." The past few decades, however, have seen an increasing amount of dissatisfaction with the Phillips curve, arising from the curves failure to remain stable over time. Recent U.S. data, for example, have produced graphs relating unemployment and inflation that "might very well have been traced by a seriously deranged butterfly." Since 1970, the Phillips curve has become an unidentified flying object. Many analysts have found that the tradeoff has deteriorated throughout the industrial world. Most beginning students of economics have been taught to believe that unemployment and inflation typically move in opposite directions. Yet, in the U.S. there is no question that the unemployment-inflation tradeoff has deteriorated since the early 1 970s, with scatter-plots over this period looking more like a cloud than a curve.

This paper tests the rational expectations-natural rate hypothesis without basing expectations on time series estimates. Instead, market-based data are used. Unexpected money supply changes are determined via the Fisher Effect and the Quantity Equation. This introduces errors of a very different kind than the traditional approach, and yet the results are remarkably similar to those generated using time series estimates. Unanticipated money shocks are shown to exert a significant but only short-run effect on real output, suggesting only a short-run Phillips curve trade-off. Anticipated money growth appears to have no effect on real output. [ABSTRACT FROM AUTHOR]

This article formulates a class of aggregate supply functions of labor which is an approximation to the backward "L" shaped supply curve originally proposed by J.M. Keynes. Forty-eight members of this class are estimated using first British and then U.S. data. We then test the hypothesis that the Keynesian "L" shaped supply function is an acceptable description of the behavior of each of these economies and find that it is. This result has fairly obvious implications both for Phillips Curve and incomes policy research. [ABSTRACT FROM AUTHOR]

The article presents research paper in response to comment of researchers Cogley and Sbordone about closed-form estimates of the new keynesian phillips curve. It states that the presence of indeterminacy nullifies the vector autoregression (VAR) used in the first stage to gather expectations. Moreover, the estimates are grounded on guidelines that are also difference equations themselves.

The article discusses a study which examines the significance of imposing a closed-form (CF) estimate of the New Keynesian Phillips Curve (NKPC). Findings reveal that CF estimates are more accurate and less affected by small sample bias. It also indicates that the inflation in the U.S. has played an important persistent component on financial trend.

The article examines the way long-run and short-run inflation expectations which serve as an important counterweight to the effects of unemployment and low production costs have operated in the U.S. The author states that short-run inflation expectations are anchored by long-run expectations in determining U.S. inflation. He mentions that the Phillips curve suggests that short-run inflation expectations should depend on short-run expectations of resource utilization.

The article focuses on the role that survey and rational expectations play in the U.S. inflation dynamics. The author uses quarterly data for inflation, output, unemployment, and real marginal cost to study how these expectations interact in reduced-form and structural models of inflation. He mentions that rational expectations of inflation generated by dynamic stochastic general equilibrium (DSGE) models with a New Keynesian Phillips curve differ from those measured by survey expectations.