منحنی فیلیپس کینزی اقتصاد باز جدید برای انگلستان

We estimate a pricing equation or “new Keynesian Phillips curve” (NKPC) obtained from a structural dynamic model of price setting based on Rotemberg [1982. Sticky prices in the United States. Journal of Political Economy 90(6), 1187–1211] and extended to capture employment adjustment costs and the openness of the United Kingdom. This model nests the baseline Galí and Gertler [1999. Inflation dynamics: a structural econometric analysis. Quarterly Journal of Economics 110, 127–159) and Sbordone [2002. Prices and unit labor costs: a new test of price stickiness. Journal of Monetary Economics 49, 265–292] relationship between inflation and marginal cost in the limiting case of no employment adjustment costs, no impact of relative prices of imported inputs on real marginal cost and a constant equilibrium markup. Our findings indicate that each of our modifications to the baseline NKPC model is important for U.K. data, so that inflation in the U.K. is explained both by changes in employment and by changes in real import prices, in general, and real oil prices, in particular. External competitive pressures also seem to affect U.K. inflation via their impact on the equilibrium price markup of domestic firms.

In this paper we explore the theoretical and empirical relationship between the share of labour, which in a Cobb–Douglas world is proportional to real marginal cost, and inflation in the U.K. in the spirit of the New Keynesian Phillips Curve (NKPC). In its simplest form, the NKPC relates log deviations of inflation from steady state to expected inflation and real marginal cost (see Galí and Gertler (1999), ‘GG’ hereafter, and Sbordone (2002)). In particular, we examine whether the labour share can be regarded as a good indicator of U.K. inflationary pressures, and, more broadly, we speculate about the future implications for inflation of the rise in the share observed since 1995. Our main points of departure from the baseline NKPC model are three. First, we allow variations in the equilibrium price markup due to external competitive pressures. Second, we account for the cost impact of changes in material input prices when the production function takes a general form. Both these modifications are meant to account for the fact that the U.K. is an open economy. Finally, in line with Rotemberg (1982) and Layard et al. (1991) (LNJ), our framework accounts not only for price but also for employment adjustment costs. These theoretical extensions to the baseline NKPC model are presented in Section 2. In Section 3 we estimate our theoretically derived pricing model by using a generalised method of moments estimator. We find a stable relationship, which implies that the measure of labour share that we employ contains information that is helpful to predict inflation. Importantly, our empirical evidence indicates that each of our modifications to the baseline GG (1999)/Sbordone (2002) NKPC model is important for U.K. data, so that inflation in the U.K. is explained both by changes in labour adjustment costs and by changes in relative prices of imported intermediate inputs, including oil prices. Concluding remarks follow.

We have examined the relationship between labour's share and the rate of inflation in the context of a simple dynamic model of firms pricing behaviour (the “new Keynesian Phillips curve”). This is based on an adjustment cost model, which includes costs of adjusting both prices and employment. We find the share of labour has a significant impact on inflation, given the output gap. In the context of a forward-looking Phillips curve, a 1 per cent increase in labour's share generates a 0.16 percentage point rise in inflation, ceteris paribus. The paper makes two additional points that are both theoretically and empirically relevant. First, we demonstrate that marginal cost will be inaccurately measured by the labour share if there are employment adjustment costs (see also Bils, 1987) and we suggest an empirical specification to evaluate this. Second, we indicate that the form of marginal cost will have to be adjusted if the production function is not Cobb–Douglas in order to take account of the relative price of imported materials when these are used in production. We provide empirical evidence that indicates that each of these modifications to the standard NKPC model of GG (1999)/Sbordone (2002) model is important for U.K. data, so that inflation in the U.K. is explained both by changes in employment and by changes in real import prices, in general, and real oil prices, in particular. We find that external competitive pressures also seem to affect U.K. inflation via their impact on the equilbrium price markup of domestic firms.