IDEAS home Printed from https://ideas.repec.org/p/ags/canzdp/263750.html
   My bibliography  Save this paper

The New Classical vs the New Keynesian Debate on the Output-Inflation Tradeoff: Evidence from Four Industrialized Countries

Author

Listed:
  • Guender, Alfred V.

Abstract

Based on quarterly data for Canada, Germany, the United Kingdom, and the United States, this paper tests the New Classical view against the extended New Keynesian view about the factors underlying the output-inflation tradeoff. The simple Lucas is amended to reflect the presence of serial correlation in nominal aggregate demand shocks. We find that the mean rate of inflation has a statistically significant negative effect on the coefficient of the anticipated component of nominal aggregate demand shocks in all four countries and a statistically significant negative effect on the coefficient of the unanticipated component in every country but Germany. Aggregate volatility affects the output-inflation tradeoff in two of the four countries. These findings are in line with the New Keynesian view but cast serious doubts on the New Classical view.

Suggested Citation

Handle: RePEc:ags:canzdp:263750
DOI: 10.22004/ag.econ.263750
as

Download full text from publisher

File URL: https://ageconsearch.umn.edu/record/263750/files/canterbury-nz-076.pdf
Download Restriction: no
File URL: https://ageconsearch.umn.edu/record/263750/files/canterbury-nz-076.pdf?subformat=pdfa
Download Restriction: no
File URL: https://libkey.io/10.22004/ag.econ.263750?utm_source=ideas
LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
---><---

More about this item

Keywords

;
;

Statistics

Access and download statistics

Corrections

All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:canzdp:263750. See general information about how to correct material in RePEc.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

We have no bibliographic references for this item. You can help adding them by using this form .

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: .

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.