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Inflation Dynamics: The Role of Expectations


This paper estimates the Phillips curve allowing for a simultaneous role of rational and survey expectations. We consider both a reduced form and a structural specification of the Phillips curve. The results suggest that survey expectations can be a statistically significant component of firms' expectations and inflation dynamics. However, rational expectations continue to play a dominant role. Copyright Published 2010. This article is a US Government work and is in the public domain in the USA..

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Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

Volume (Year): 42 (2010)
Issue (Month): 6 (09)
Pages: 1161-1172

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Handle: RePEc:mcb:jmoncb:v:42:y:2010:i:6:p:1161-1172
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