Monetary Policy and the Informational Implications of the Phillips Curve

Bibliographic Data

ID9723255
AuthorsGeorge S Alogoskoufis, George Alogoskoufis (0000-0001-6196-6325, corresponding author)
Year1990
Volume57
Issue225
Pages107
Publication date1990-02-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherJSTOR (PUBLISHER)
DOI10.2307/2554084
OpenAlexW2079133029
LanguageEN
Citations received3
References cited4

In this paper I examine optimal monetary policy and the informational implications of the Phillips curve in a stochastic macroeconomic model. It is assumed that wages are not only indexed to the price level, but respond to the state of the labor market as well. If information about current disturbances is conveyed only through market prices, it turns out that wages have independent informational content, over and above the informational content of other aggregate prices. The optimal policy in this model implies reactions to changes in both wages and the aggregate price level, as, unlike the commonly used model of Gray and Fischer, wages and prices are only partially correlated signals about the unobserved disturbances. The paper also discusses an extension to an open economy and the relation between exchange rate policy and wages. Copyright 1990 by The London School of Economics and Political Science

Econometrics · Economics · Exchange rate · Keynesian economics · Macroeconomics · Monetary economics · Monetary policy · Phillips curve · Price level · Economic theories and models · Economic Theory and Policy · Monetary Policy and Economic Impact

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