A recent IMF report highlights the fact that the German automobile industry embrace of this trend has allowed it to remain a leading producer and exporter of passenger cars with a global market share of around 20 per cent as of 2012.
Despite its pitfalls, a prime tool for making such an assessment is the New Keynesian Phillips curve. [6] Under this framework, firms set prices as a mark-up over marginal costs. Because firms are forwardlooking and change prices only infrequently, profit maximisation implies that consumer price inflation fundamentally depends on current and future expected real marginal costs.