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Price and wage inflation persistence across countries and monetary regimes

Author

Listed:
  • Beqiraj Elton
  • Di Bartolomeo Giovanni
  • Di Pietro Marco

Abstract

We augmented a macro-model with intrinsic-inflation inertia assuming that prices farer in the past are more likely to be reset. After estimating the model for seven economies, we compared price/wage structures and explored the possibility that their changes can be related to changes in policy stances. We find evidence for duration-dependent-price adjustments. Price and wage stickiness are correlated. Although positively sloped, after few periods, price-hazard functions often become flat as in Calvo-based models. Instead, wage-hazard shapes are in line with Taylor contracts. Regarding monetary policy stances, no systematic effect is found. Observed changes are explained by country-specific factors (e.g., market reforms).

Suggested Citation

  • Beqiraj Elton & Di Bartolomeo Giovanni & Di Pietro Marco, 2020. "Price and wage inflation persistence across countries and monetary regimes," wp.comunite 00150, Department of Communication, University of Teramo.
    • Handle: RePEc:ter:wpaper:00150
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    Cited by:

    1. DI BARTOLOMEO, Giovanni & SERPIERI, Carolina, 2023. "Optimal monetary policy and the vintage-dependent price and wage Phillips curves: An international comparison," Working Papers 2023004, University of Antwerp, Faculty of Business and Economics.
    2. Eric Hernández Ramírez & Armando Sánchez Vargas & Francisco López Herrera, 2024. "El efecto heterogéneo de las remuneraciones laborales en la inflación mexicana," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 19(2), pages 1-23, Abril - J.
    3. Di Bartolomeo, Giovanni & Serpieri, Carolina, 2024. "Optimal monetary policy and the time-dependent price and wage Phillips curves: An international comparison," Journal of International Money and Finance, Elsevier, vol. 146(C).

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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