Pricing Process in Mexico: New Evidence on the Inflation Dynamics
We analyze the inflation dynamics in Mexico during inflation targeting period by a GMM estimate of the Hybrid New Keynesian Phillips Curve in its open and closed economy versions. We update and discuss previous results and expand the capacity of this tool to analyze inflationary dynamics by incorpor...
| Autores: | , , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2022 |
| País: | Colombia |
| Institución: | Universidad EAFIT |
| Repositorio: | Repositorio EAFIT |
| Idioma: | inglés |
| OAI Identifier: | oai:repository.eafit.edu.co:10784/30998 |
| Acceso en línea: | http://hdl.handle.net/10784/30998 |
| Access Level: | acceso abierto |
| Palabra clave: | Inflation Dynamics Hybrid New Keynesian Phillips Curve Generalized Method of Moments Structural Change Open Economy Dinámica de la Inflación Curva de Phillips Neokeynesiana Híbrida Método Generalizado de Momentos Cambio Estructural Economía Abierta |
| Sumario: | We analyze the inflation dynamics in Mexico during inflation targeting period by a GMM estimate of the Hybrid New Keynesian Phillips Curve in its open and closed economy versions. We update and discuss previous results and expand the capacity of this tool to analyze inflationary dynamics by incorporating the exchange rate on labor costs. We find: a) robust evidence of adaptive and rational expectations; b) incorporating the exchange rate improves the inflation fit; c) this version of the Phillips Curve has strengthened since Great Recession, and e) expectations formation process changes during inflationary episodes according to the origin of shocks |
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