Flattening of the Phillips curve and the role of the oil price: An unobserved component model for the USA and Australia
AbstractWe used the unobserved component model of Harvey (1989, 2011) to estimate the Phillips curve for the USA and Australia, augmenting it with the oil price. Our results show that while the coefficient of demand pressure and the intercept decreased, the coefficient of the oil price increased. Therefore, the oil price is likely to play a significant role in future inflation rates.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 117 (2012)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/ecolet
Unobserved component model; USA; Australia; Flattening Phillips curve; Oil price;
Find related papers by JEL classification:
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
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