Inflation Dynamics and Real Marginal Costs: New Evidence from U.S. Manufacturing Industries

Emiliano Santoro, Ivan Petrella

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

11 Citazioni (Scopus)


This paper deals with the analysis of price-setting in U.S. manufacturing industries. Recent studies have heavily criticized the ability of the New Keynesian Phillips curve (NKPC) to fit aggregate inflation [see, e.g., Rudd and Whelan, 2006, Can Rational Expectations Sticky-Price Models Explain Inflation Dynamics?, American Economic Review, vol. 96(1), pp. 303-320 ]. We challenge this evidence, showing that forward-looking behavior as implied by the New Keynesian model of price-setting is widely supported at the sectoral level. In fact, current and expected future values of the income share of intermediate goods emerge as an effective driver of inflation dynamics. Unlike alternative proxies for the forcing variable, the cost of intermediate goods presents dynamic properties in line with the predictions of the New Keynesian theory.
Lingua originaleEnglish
pagine (da-a)1817-1830
Numero di pagine14
Stato di pubblicazionePubblicato - 2012


  • Aggregation
  • Intermediate Goods
  • New Keynesian Phillips Curve
  • Sectoral Data


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