Regime Shifts and the Stability of Backward Looking Phillips Curves in Open Economies

Efrem Castelnuovo

No 15, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: We assess the stability of open economy backward-looking Phillips curves estimated over two different exchange rate regimes. We calibrate a new-Keynesian monetary policy model and employ it for producing artificial data. A monetary policy break replicating the move from a Target-Zone regime to a Free-Floating regime implemented in Sweden in 1992 is modeled. We employ two different, plausibly calibrated Taylor rules to describe the Swedish monetary policy conduct, and fit a reduced-form Phillips curve to the artificial data. While not rejecting the statistical relevance of the Lucas critique, we find that its economic importance does not seem to be overwhelming.

JEL-codes: E17 E52 F41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2006-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Related works:
Working Paper: Regime Shifts and the Stability of Backward Looking Phillips Curves in Open Economies (2010)
Journal Article: Regime shifts and the stability of backward-looking Phillips curves in open economies (2008)
Working Paper: Regime Shifts and the Stability of Backward Looking Phillips Curves in Open Economies (2005)
Working Paper: Regime Shifts and the Stability of Backward Looking Phillips Curves in Open Economies (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:pad:wpaper:0015

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