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Estimation of Phillips Curve with Regression Models of Smooth
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Hossein Amiri   , Ebrahim Gorji |
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Abstract: (12622 Views) |
| The Phillips curve usually has been estimated in a linear framework which implies a stable constant relationship between inflation and unemployment. Some of the studies claim that the slope of the Phillips curve is a function of macroeconomic conditions and also the relationship is asymmetric. This article deals with a smooth transition regression model for relationship between inflation and unemployment for Iran, during the period of 1971 -2007. Smooth transition regression model is a non linear time series regression model which could be considered as developed form of regime switching regression model. Results show that there is a negative and nonlinear relationship between inflation and unemployment in short-term. Regarding this result it's highly important for policy makers to be able to make a relationship between these two variables |
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| Keywords: Phillips curve, Inflation, Unemployment, GDP Gap, Nonlinear Phillips Curve, Smooth Transition Regression Models |
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Type of Study: Applicable |
Subject:
رشد و توسعه و سیاست های کلان
Received: 2011/05/10 | Accepted: 2011/06/26 | Published: 2011/06/15
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