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Input-Output Structure and New Keynesian Phillips Curve
, 2007
"... I show that an input-output production structure reinforces per-sistence in the pricing behavior of
rms using a Calvo mechanism. In particular, optimal price today depends upon expected optimal prices in the in
nite future and those set in the in
nite past. This is due to a part of a
rms marginal ..."
Abstract
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I show that an input-output production structure reinforces per-sistence in the pricing behavior of
rms using a Calvo mechanism. In particular, optimal price today depends upon expected optimal prices in the in
nite future and those set in the in
nite past. This is due to a part of a
rms marginal cost being represented by other
rmsprice. It follows that the e¤ect of marginal cost on ination in the new Key-nesian Phillips curve is dampened by the presence of the input-output structure. This helps in explaining the di¤erence between the most recent empirical evidence on price adjustment frequency in the U.S. (Bils and Klenow, 2004) and structural estimates of the new Keyne-sian Phillips curve.
On the Robustness of R&D
"... Alternative models of productivity predict a range of its determinants besides that of research and development (R&D). We investigate the robustness of R&D vis-à-vis a dozen productivity determinants in a panel of 16 Organisation for Economic Co-operation and Development (OECD) countries thr ..."
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Alternative models of productivity predict a range of its determinants besides that of research and development (R&D). We investigate the robustness of R&D vis-à-vis a dozen productivity determinants in a panel of 16 Organisation for Economic Co-operation and Development (OECD) countries through panel cointegration, bootstrap simulations and extensive sensitivity tests. Domestic knowledge stocks, international knowledge diffusion and human capital remain robust across all measures. The cross-country differences in accumulated knowledge stocks and human capital appear to explain productivity differences across countries.
