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Inflation dynamics under habit formation in hours

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  • Kamber, Günes

Abstract

This paper studies the implications of habit formation in hours for inflation dynamics. Using a New Keynesian Model, we show that habit formation in hours lowers the response of inflation to a monetary policy shock and that it can help to account for the observed sluggish response of inflation.

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  • Kamber, Günes, 2010. "Inflation dynamics under habit formation in hours," Economics Letters, Elsevier, vol. 108(3), pages 269-272, September.
    • Handle: RePEc:eee:ecolet:v:108:y:2010:i:3:p:269-272
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    10. Molodtsova, Tanya & Nikolsko-Rzhevskyy, Alex & Papell, David H., 2008. "Taylor rules with real-time data: A tale of two countries and one exchange rate," Journal of Monetary Economics, Elsevier, vol. 55(Supplemen), pages 63-79, October.
    11. Hafedh Bouakez & Takashi Kano, 2006. "Learning-by-Doing or Habit Formation?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(3), pages 508-524, July.
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    Cited by:

    1. Kamber, Gunes & McDonald, Chris & Sander, Nick & Theodoridis, Konstantinos, 2016. "Modelling the business cycle of a small open economy: The Reserve Bank of New Zealand's DSGE model," Economic Modelling, Elsevier, vol. 59(C), pages 546-569.
    2. Güneş Kamber & Chris McDonald & Nicholas Sander & Konstantinos Theodoridis, 2015. "A structural model for policy analysis and forecasting: NZSIM," Reserve Bank of New Zealand Discussion Paper Series DP2015/05, Reserve Bank of New Zealand.

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