Authors: Bredemeier, Christian
Goecke, Henry
Title: Sticky prices vs. sticky information
Other Titles: A cross-country study of inflation dynamics
Language (ISO): en
Abstract: This paper compares sticky-price and sticky-information Phillips curves empirically considering inflation dynamics in eleven countries (the G7 and Scandinavia). We evaluate the models` abilities to match empirical second moments of inflation. Although overall model performance is similar, there is a strong systematic pattern in model performance by moment type. Sticky prices match unconditional moments of inflation dynamics clearly better while sticky information is considerably more successful in matching co-movements of inflation with demand.
Subject Headings: Phillips curve
sticky information
sticky prices
Issue Date: 2012-06-12
Appears in Collections:Sonderforschungsbereich (SFB) 823

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