A new Keynesian triangle Phillips curve

Abstract

We propose a solution to address the observed negative sign on the marginal cost variable in new Keynesian Phillips curve estimations. Our solution is based on an elaborate speci…cation of the cost function faced by …rms and the formulation of a reduced-form production function which is characterised by non-linear input-output relations. The resultant Phillips curve features the standard hybrid expectational term, labour share, output gap, speed-limit e¤ects and supply shock variables. In general, GMM estimations of the model for developed and emerging markets yield a positive and signi…cant coe¢ cient on the labour share and the output gap. We conclude that supply shock variables are essential to the empirical validity of the cost-based Phillips curve.

Examining asymmetric effects in the South African Phillips curve: evidence from logistic smooth transition regression models

“…2)] provide a good fit for the data. Notably, the fit of the HNKPC to South African data has also been confirmed in the studies of Burger and Du Plessis (2013) as well as in that of Malikane (2014). In further referring to the results reported in Table 5, we find it encouragingly that for the output gap-based HNKPC, the sum of the coefficients for the inflation inertia variable and the inflation expectations ).…”

“…In further referring to the results reported in Table 5, we find it encouragingly that for the output gap-based HNKPC, the sum of the coefficients for the inflation inertia variable and the inflation expectations ). These results are an improvement over those obtained in Burger and Du Plessis (2013) and are closer in nature to those obtained in Malikane (2014) who finds that under the marginal cost-based South African HNKPC curve, the sum of the coefficients on the inflation inertia and inflation expectations variables is close to unity. As rigorously discussed by Gali and Gertler (1999), this is a theoretically sufficient condition for proving the validity of the HNKPC specification.…”

The Phillips curve in the US: A nonlinear quantile regression approach

“…It is certain that some other complex forms of the hybrid Phillips curve can be obtained by considering different economic environments in a framework similar to Calvo (1983). See Arslan (2010), Zhang and Murasawa (2011) and Malikane (2014) for more details. We also propose a nonlinear hybrid Phillips curve model as follows…”

Sovereign wealth funds and macroeconomic stability in oil‐exporting African countries

“…Similar to Batini et al . (), Malikane () and Rasaki and Malikane (), the production function is non‐linear in input requirement such that where is the non‐labour input required in production, is the output, and is the elasticity of the input requirement with respect to changes in output. As in Smets and Wouters (), labour and non‐labour inputs are complements.…”