A Multimarket Approach for Estimating a New Keynesian Phillips Curve
We propose a new approach for estimating a “hybrid” New Keynesian Phillips Curve (NKPC) that includes demand pressures coming from disequilibrium relations in three different markets: (1) monetary and financial, (2) international, and (3) labour. Econometric tests indicate that this specification is superior to the traditional NKPC, which includes a single variable to account for demand pressures.