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About the sources of the inflation persistence in Russia

Author

Listed:
  • Ekaterina Ponomareva

    (Gaidar Institute for Economic Policy)

Abstract

The standard way to obtain the equation of New Keynesian Phillips curve is to linearize the equilibrium conditions of the Calvo model around a steady state with zero inflation. This approach is appropriate only in the low-inflation economics. This paper considers New Keynesian Phillips curve derived by linearizing the same equilibrium conditions around the time varying inflation trend. This model explains observed inflation persistence in different way and gives the different view on the ratio of agents with backward- and forward-looking expectations. In the paper estimated New Keynesian Phillips curve with time varying coefficients. This model shows that in Russia exist at least two sources of the inflation persistence.

Suggested Citation

  • Ekaterina Ponomareva, 2012. "About the sources of the inflation persistence in Russia," Working Papers 0016, Gaidar Institute for Economic Policy, revised 2012.
    • Handle: RePEc:gai:wpaper:0016
    as

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    References listed on IDEAS

    as
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    7. Jacquier, Eric & Polson, Nicholas G & Rossi, Peter E, 1994. "Bayesian Analysis of Stochastic Volatility Models: Comments: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(4), pages 413-417, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    : New Keynesian Phillips Curve; backward- and forward-looking expectations; inflation persistence; Bayesian VAR;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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