Economics, Econometrics and Finance
4 years ago

Inflation persistence driven by intrinsic factors, not inherited characteristics.

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International journal of central banking
Intrinsic and Inherited Inflation Persistence
Jeffrey C. Fuhrer

Paper Summary

The main source of inflation persistence is intrinsic rather than inherited from past inflation or indexing behavior. This is because the coefficient on the driving process is small, and shocks to the New Keynesian Phillips curve are large.

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