DP6834 Can the Facts of UK Inflation Persistence be Explained by Nominal Rigidity?
|Author(s):||David Meenagh, Patrick Minford, Eric Nowell, Prakriti Sofat, Naveen Srinivasan|
|Publication Date:||May 2008|
|Keyword(s):||Inflation Persistence, Monetary Regime Shifts, New Classical, New Keynesian, Nominal Rigidity|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=6834|
It has been widely argued that inflation persistence since WWII has been widespread and durable and that it can only be accounted for by models with a high degree of nominal rigidity. We examine UK post-war data where after confirming previous studies? findings of varying persistence due to changing monetary regimes, we find that models with little nominal rigidity are best equipped to explain it.