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Can the Facts of UK Inflation Persistence be Explained by Nominal Rigidity?

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  • Meenagh, David
  • Minford, Patrick
  • Nowell, Eric
  • Sofat, Prakriti
  • Srinivasan, Naveen

Abstract

It has been widely argued that inflation persistence since WWII has been widespread and durable and that it can only be accounted for by models with a high degree of nominal rigidity. We examine UK post-war data where after confirming previous studies’ findings of varying persistence due to changing monetary regimes, we find that models with little nominal rigidity are best equipped to explain it.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6834.

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Date of creation: May 2008
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Handle: RePEc:cpr:ceprdp:6834

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Keywords: Inflation Persistence; Monetary Regime Shifts; New Classical; New Keynesian; Nominal Rigidity;

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References

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Cited by:
  1. Naveen Srinivasan & Pankaj Kumar, 2012. "Inflation Persistence: Does Credibility of the Monetary Regime Matter?," Economics Bulletin, AccessEcon, vol. 32(4), pages 2944-2954.
  2. Vo Phuong Mai Le & Patrick Minford & Michael Wickens, 2009. " The ‘Puzzles’ Methodology: En Route to Indirect Inference?," CDMA Conference Paper Series 0903, Centre for Dynamic Macroeconomic Analysis.
  3. Fan, Jingwen & Minford, Patrick, 2010. "Can the Fiscal Theory of the price level explain UK inflation in the 1970s?," CEPR Discussion Papers 7630, C.E.P.R. Discussion Papers.

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