Is the Phillips curve disappearing? Evidence from a new test procedure

Furuoka, Fumitaka; Pui, Kiew Ling; Chomar, Ma Tin; Nikitina, Larisa

doi:10.1080/13504851.2020.1761528

Cited by 10 publications

(11 citation statements)

References 19 publications

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“…The point estimates indicate that if the output gap increases by one percentage point, headline inflation could increase by between 0.2 and 0.29 basis points, while the increment for core inflation is between 0.08 and 0.20 basis points. Our estimates using regional-level data are generally larger than those obtained by Juhro (2015) and Furuoka et al (2021) when using national-level data. The effect of the non-mining output gap is larger than the total output gap, indicating higher sensitivity of inflation to non-mining economic activities at a regional level in Indonesia.…”

Section: Empirical Findings and Discussioncontrasting

confidence: 92%

“…1 Using a more rigorous assessment, the author also finds that the Phillips curve coefficient steadily declines, especially during the post-Global Financial Crisis (GFC) period. Similarly, Furuoka et al (2021) show the tendency of the Phillips curve coefficient in Indonesia to converge toward zero.…”

Section: Introductionmentioning

confidence: 99%

“…Similarly, Furuoka et al . (2021) show the tendency of the Phillips curve coefficient in Indonesia to converge toward zero.…”

Section: Introductionmentioning

confidence: 99%

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Inflation and Spatial Spillovers in a Large Archipelago: Evidence from Indonesia*

Aginta

2023

J of App Econs and Policy

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This study examines inflation dynamics in Indonesia, a large archipelagic country, using the Phillips curve specification. Utilising province‐level data from 2015 to 2019, the analysis accounts for regional interaction across Indonesian provinces and estimates spatial spillovers. To address the challenges of applying spatial methods to the world's largest archipelagic nation, two new approaches for the spatial weight matrix criteria are introduced: contiguity‐based from artificial boundaries (Thiessen polygons) and trade‐based from the Interregional Input–Output Tables. Furthermore, exploiting a new dataset, the study contrasts alternative measurements of inflation and output gap. These distinctions yield new findings. The results indicate the presence of a conventional Phillips curve in Indonesia. Different measures of inflation and the output gap have distinct spatial spillover effects.

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Section: Empirical Findings and Discussioncontrasting

confidence: 92%

Section: Introductionmentioning

confidence: 99%

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Inflation and Spatial Spillovers in a Large Archipelago: Evidence from Indonesia*

Aginta

2023

J of App Econs and Policy

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“…Various empirical studies were undertaken on unemployment and inflation relation as indicated by the Phillip's curve. For example, Fedderke and Schaling (2005), Burger and Marinkov (2006), Furuoka (2007), Touny (2013), andPhiri (2015). Some of the above-mentioned studies confirmed the existence of a long-run trade-off relationship between the two variables, and others found no evidence of inflation unemployment trade-off.…”

Section: Inflation and Unemploymentmentioning

confidence: 94%

Unemployment Behaviour in the Covid-19 Pandemic: Evidence From Developing Countries

Tang

Abosedra

2023

IJBS

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This paper explores the impacts of the COVID-19 pandemic, corruption and other determinants on unemployment in developing countries using panel dataset for 89 developing countries from January to December 2020. The proposed unemployment model is estimated utilising a newly formulated conceptual framework to examine whether COVID-19 pandemic, corruption, and human capital, play a moderating role on unemployment determination in our selected developing countries. The model is estimated using the dynamic panel system generalised method of moments (GMM) estimator. Apart from output, inflation and human capital, our results show that the COVID-19 pandemic and corruption are major variables in explaining the unemployment rate for our sampled countries. Furthermore, and more notably, we find evidence that the COVID-19 pandemic and corruption appear to significantly restrain and alter the role of outputs and human capital in impacting unemployment. Therefore, the detrimental effects of the COVID-19 pandemic and corruption on the economies and labour markets of countries examined should not be under-estimated. Additionally, findings show that, while policy initiatives to combat the COVID-19 pandemic are critical, strengthening anti-corruption regulations would further improve the efficiency of any attempt to reduce unemployment rates associated with the COVID-19 period.

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“…Nevertheless, according to PhilipsâȂŹs curve [4], there is a tradeoff between inflation and unemployment. The main implication of this relationship is that if a country wants to keep a low inflation rate, it must accept a high unemployment rate [5]. This paper's main objective is to examine the relationship between inflation and the unemployment rate in Egypt.…”

Section: Introductionmentioning

confidence: 99%

The impact of inflation on the unemployment rate in Egypt: a VAR approach

Omran

Bilan

2021

SHS Web Conf.

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Unemployment and inflation are among the most critical phenomena facing both developed and developing countries due to their harmful social, economic, and political effects. The Egyptian monetary policy’s main objective is to maintain a low inflation rate in the medium run to keep the confidence and a high rate of investment and economic growth. At the same time, economists argue that targeting a low-rate of inflation may increase unemployment. Although the classical Philips curve indicates a trade-off between inflation and unemployment, several empirical studies have argued that the relationship between inflation and unemployment depends on the shocks’ source and lagged responses. The main objective of this paper is to examine the relationship between inflation and Egypt’s unemployment rate. We used time-series data from 1980 to 2019, where a vector autoregressive (VAR) model and the Impulse response function tool (IRF) were employed. The results show that inflation has a positive relationship with GDP while negatively affecting the unemployment rate.

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Is the Phillips curve disappearing? Evidence from a new test procedure

Cited by 10 publications

References 19 publications

Inflation and Spatial Spillovers in a Large Archipelago: Evidence from Indonesia*

Inflation and Spatial Spillovers in a Large Archipelago: Evidence from Indonesia*

Unemployment Behaviour in the Covid-19 Pandemic: Evidence From Developing Countries

The impact of inflation on the unemployment rate in Egypt: a VAR approach

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