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Can the Facts of UK Inflation Persistence Be Explained by Nominal Rigidity?

39 Pages Posted: 12 Jun 2008  

David Meenagh

Cardiff University Business School

Patrick Minford

Cardiff University Business School; Centre for Economic Policy Research (CEPR)

Eric Nowell

University of Liverpool Management School (ULMS) - Economics Division

Prakriti Sofat

Cardiff University Business School

Naveen Srinivasan

Cardiff University Business School

Date Written: May 2008

Abstract

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.

Keywords: Inflation Persistence, Monetary Regime Shifts, New Classical, New Keynesian, Nominal Rigidity

JEL Classification: E31, E37

Suggested Citation

Meenagh, David and Minford, Patrick and Nowell, Eric and Sofat, Prakriti and Srinivasan, Naveen, Can the Facts of UK Inflation Persistence Be Explained by Nominal Rigidity? (May 2008). , Vol. , pp. -, 2008. Available at SSRN: https://ssrn.com/abstract=1143197

David Meenagh (Contact Author)

Cardiff University Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom
+44 29 2087 5198 (Phone)
+44 29 2087 4419 (Fax)

Patrick Minford

Cardiff University Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom
+44 29 2087 5728 (Phone)
+44 29 2087 4419 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Eric Nowell

University of Liverpool Management School (ULMS) - Economics Division ( email )

Eleanor Rathbone Building
Bedford Street North
Liverpool L69 7ZA
United Kingdom
+44 15 1794 3058 (Phone)
+44 15 1794 3032 (Fax)

Prakriti Sofat

Cardiff University Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Naveen K. Srinivasan

Cardiff University Business School ( email )

Colum Drive
Aberconway Building
Cardiff CF10 3EU
United Kingdom
+44 029 2087 6545 (Phone)
+44 029 2087 4419 (Fax)

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