The New-Keynesian Model Part 3: Calvo Pricing and Microfounded Phillips Curve

[@EconMind]

Such a great video. It saved my life.

[@KlausPrettner]

Thank you very much. I am very happy that the video was useful.

[@stefanzobel1370]

Exactly what I was looking for. This was extremly helpful. Thank you!

[@KlausPrettner]

Thank you very much! I am glad you find the videos useful!

[@teshex]

The topic is very interesting! Your presentation is excellent.

[@KlausPrettner]

Thank you very much for your positive feedback!

[@ulugbektursunov4702]

Great explanations! Thank you very much, Professor!

[@KlausPrettner]

Thank you very much for your positive feedback!

[@juanjo9640]

Thank you very much, Professor Prettner.

[@길동홍-f2t]

thank you so much dr.prettner this lecture is amazing it helped me a lot! really appreicate it

[@KlausPrettner]

Thank you very much for your positive feedback! I am glad you liked the lecture!

[@miguelrb8011]

Hi professor, i have another doubt sorry to bother you: i cannot see the equivalence in a positive output gap and the optimal price being higher than the actual price. P*-Pt=Phi(y). Why would a lower price give a higher output? Another way to phrase my doubt would be why do we turn (P*-Pt) into (Yt-Y*), because that'd imply P*=Yt and Pt=Y*. Again, a million thanks.

[@KlausPrettner]

I think you need to interpret it the other way round. The optimal price is higher if the (positive) output gap is greater. So if the economy is running above capacity, firms have an incentive to set higher prices.

[@miguelrb8011]

Hello professor, thank you for your lectures. Sorry to bother you, but I watch the other videos and the FOC from labor supply gives w-p=n+(phi)·y--- i fail to see the connection with the difference between optimal price and actual price. Could you please elaborate? Again, a million thanks!!

[@KlausPrettner]

In the simple model without capital and no technical change, the marginal product of labor does not change. So the only thing that can change the real wage rate, is inflation. Does this help?

[@miguelrb8011]

@@KlausPrettner Analytically I think it would go as follows: let the price price be a mark-up "u" over marginal cost: P*=CMg+u;-u=CMg-P*=RealCMg* (optimum real marginal cost) Then (phi)=P*-Pt=CMg+u-Pt=RealCMgt-ReamCMg* As output can be described as a function of marginal cost: (phi)=P*-Pt=yt-y*

[@defapuspita7713]

Where i can found part 1 and 2

[@KlausPrettner]

Here are the links to the other two parts: part 1: kzbin.info/www/bejne/l4LEfoaPrNKMhdUsi=Le8_gjNvukbO5ENb part 2: kzbin.info/www/bejne/oGGXaX6Vrsdmnposi=-1JlUYPMrC0KyDyo