The Microeconomics Model Of Philips Curve And Application Inchina

Firstly, we have discussed the shortcomings of traditional Phillips Curve, whichis either just an empirical description or just comes from the pricing model of firms.However, in this paper, we have modeled two types of Phillips Curves, they areRational Expectations Phillips Curve under perfect information and adaptiveexpectations Philip Phillips Curve under imperfect information, based on threemarkets, they are labor market, capital market and monetary market.Then, we have used the growth rate of PPI and GDP from the year of1978-2013to fit the adaptive expectations Philip Phillips Curve, we have found that adaptiveexpectations Philip Phillips Curve exists in China. Meanwhile, we have made ChouStructure Mutation Test, and found that there is a break point in1996, so we havedivided the samples into two parts, they are the year of1978-1995and the year of1996-2013, and we have estimated the two samples by NLS respectively, the resultshows that the growth rate of potential output of the two samples are6.18,8.12%respectively, this is also a method of estimating output gap.At last, we have proposed three policy reference, those are monitoring inflation,making appropriate monetary policy and looking for new economy growth point,based on the theoretical analysis and empirical analysis of earlier models.