Observed inflation forecasts and the new keynesian phillips curve

Chengsi Zhang, Denise R. Osborn, Dong Heon Kim

Research output: Contribution to journalArticlepeer-review

28 Citations (Scopus)


This paper investigates the empirical success of the New Keynesian Phillips Curve (NKPC) in explaining US inflation when observed measures of inflation expectations are used in conjunction with the output gap. The paper contributes to the literature by addressing the important problem of serial correlation in the stylized NKPC and developing an extended model to account for this serial correlation. Contrary to recent results indicating no role for the output gap, we find it to be a statistically significant driving variable for inflation, with this finding robust to whether the inflation expectations series used relates to individual consumers, professional forecasters or the US Fed.

Original languageEnglish
Pages (from-to)375-398
Number of pages24
JournalOxford Bulletin of Economics and Statistics
Issue number3
Publication statusPublished - 2009 Jun

ASJC Scopus subject areas

  • Statistics and Probability
  • Social Sciences (miscellaneous)
  • Economics and Econometrics
  • Statistics, Probability and Uncertainty


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