E-Knjižnica FET "Dr. Mijo Mirković"

Stability of Phillips curve: the case of Croatia

Šergo, Zdravko and Saftić, Darko and Težak, Ana (2011) Stability of Phillips curve: the case of Croatia. In: The 5th International Scientific Conference "Entrepreneurship and Macroeconomic Management: Reflections on the World in Turmoil".

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Phillips curves are generally estimated under the assumption of linearity and parameter constancy. The conventional Phillips curve argues that there is a trade-off or negative relationship between unemployment and inflation or wage inflation. According to Lucas's critique of econometrics' empirics, however, there is no parameter stability in the forward-looking economic behaviour model of economic agents. Since the rational expectation theory revolution linear models of inflation have been criticised for their poor forecasting performance. Bai and Perron (1998), proposed the methodology which allows for an unknown number of breaks at unknown dates as a response to the mentioned problem. The purpose of this paper is to investigate the linearity and constancy assumptions of the augmented Phillips curve model using expected inflation variables and the methodology proposed by Bai and Perron and to validate the Phillips curve using Croatia as an example. Data used in this analysis was on quarterly basis from 1994 to 2010.

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Tip objekta: Materijal konferencije ili radionice (Paper)
Mentor: NIJE ODREĐENO
Dodatne informacije: 5/2011
Ključni pojmovi: Structural changes, Inflation, Nominal wages, Unemployment, Phillips curve, Croatia
Teme: 3 Društvene znanosti > 33 Ekonomija. Ekonomska znanost > 336 Financije. Uključujući: Javne financije. Bankarstvo. Novac > 336.7 Novac. Monetarni sustav. Bankarstvo. Burze
Odjeli: Odjel za ekonomiju i turizam "Dr. Mijo Mirković"
Datum pohrane: 08 Jan 2013 07:24
Zadnja promjena: 08 Jan 2013 07:24
URI: http://eknjiznica.unipu.hr/id/eprint/1945

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