TY  - BOOK
AU  - Gali,Jordi
AU  - Gertler,Mark
ED  - National Bureau of Economic Research.
TI  - Inflation Dynamics: A Structural Econometric Analysis 
T2  - NBER working paper series
PY  - 2000///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - February 2000; Hardcopy version available to institutional subscribers
N2  - We develop and estimate a structural model of inflation that allows for a fraction of firms that use a backward looking rule to set prices. The model nests the purely forward looking New Keynesian Phillips curve as a particular case. We use measures of arginal cost as the relevant determinant of inflation, as the theory suggests, instead of an ad-hoc output gap. Real marginal costs are a significant and quantitatively important determinant of inflation. Backward looking price setting, while statistically significant, is not quantitatively important. Thus, we conclude that the New Keynesian Phillips curve provides a good first approximation to the dynamics of inflation
UR  - https://www.nber.org/papers/w7551
UR  - http://dx.doi.org/10.3386/w7551
ER  -