Inflation dynamics and labor market specifications: A bayesian dynamic stochastic general equilibrium approach for japan's economy

Hibiki Ichiue, Takushi Kurozumi, Takeki Sunakawa

研究成果: Article査読

7 被引用数 (Scopus)

抄録

Which labor market specification is better able to describe inflation dynamics, a widely used sticky wage model or a recently investigated labor market search model? Using a Bayesian likelihood approach, we estimate these two models with Japan's data. This article shows that the labor market search model is superior to the sticky wage model in terms of both marginal likelihood and out-of-sample forecast performance, particularly regarding inflation. The labor market search model is better able to replicate the cross-correlation among inflation, real wages, and output in the data. Moreover, in this model, real marginal cost is determined by both hiring cost and unit labor cost that varies with employment fluctuations, which gives rise to a high contemporaneous correlation between inflation and real marginal cost as represented in the New Keynesian Phillips curve.

本文言語English
ページ(範囲)273-287
ページ数15
ジャーナルEconomic Inquiry
51
1
DOI
出版ステータスPublished - 2013 1月
外部発表はい

ASJC Scopus subject areas

  • ビジネス、管理および会計(全般)
  • 経済学、計量経済学

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