Inflation Is An Important Issue For Both Monetary Policy Makers And The Phillips Curve By John M. Roberts

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Inflation persistence is an important issue for both monetary policy makers and theorists. However, there still exist some arguments that some model of pricing fail to explain the persistence. This paper summarizes two papers: inflation persistence by Jeff Fuhrer and George Moore and New Keynesian Economics and the Phillips Curve by John M. Roberts. We are going to follow the idea of Roberts (1995) and use the model in “Monetary Theory and Policy” second edition written by Carl E. Walsh. Section 1 gives the reason why inflation persistence is important. And also briefly introduce three different models that are summarized within the paper of Fuhrer and Moore (1995) and the book of Walsh. Section 2 introduces two kind of New Keynesian Phillips Curve deriving from Taylor (1980) model as well as Calvo (1983) model. Section 3 shows the Fuhrer and Moore’s (1995) inflation persistence model and can get the Hybrid Phillips curve. Section 4 compare Taylor model with Fuhrer and Moore’s model. And for the last section give the conclusion and comment on different three models.

Inflation persistent is an important issue for both monetary policy makers and theorists. For policy markers, study inflation persistent could let them know how rapidly there policy action takes effect. And for theorists, this research topic focus on what extent the theorists are consistent with empirical evidence on persistent. The wage contract model is the most popular
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