TY  - JOUR
AU  - Razin,Assaf
TI  - Aggregate Supply and Potential Output
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10294
PY  - 2004
Y2  - February 2004
UR  - http://www.nber.org/papers/w10294
L1  - http://www.nber.org/papers/w10294.pdf
N1  - Author contact info:
Assaf Razin
Department of Economics
Cornell University
Uris 422
Ithaca, NY 14853
Tel: 607/255-9625
Fax: 607/255-2818
E-Mail: ar256@cornell.edu
AB  - The New-Keynesian aggregate supply derives from micro-foundations an inflation-dynamics model very much like the tradition in the monetary literature. Inflation is primarily affected by: (i) economic slack; (ii) expectations; (iii) supply shocks; and (iv) inflation persistence.  This paper extends the New Keynesian aggregate supply relationship to include also fluctuations in potential output, as an additional determinant of the relationship. Implications for monetary rules and to the estimation of the Phillips curve are pointed out.
ER  -