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How Firms and Experts View The Phillips Curve: Evidence from Individual and Aggregate Data from South Africa

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  • Monique B. Reid
  • Pierre L. Siklos

Abstract

Heterogeneity is now a regular part of macroeconomic theory, but disaggregated data about firm expectations remain scarce. A survey of firms and financial analysts in South Africa provides forecasts of inflation and other macroeconomic variables. We estimate a variety of inflation and wage growth-based Phillips curves, which reflect differences in how firms and financial analysts view the link between inflation and real economic activity, as well as heterogeneity across firms. South African Phillips curves have become flatter, but backward-looking factors remain more relevant for firms. Rising real wage growth exceeds expected and past inflation and wage growth since the GFC.

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  • Monique B. Reid & Pierre L. Siklos, 2022. "How Firms and Experts View The Phillips Curve: Evidence from Individual and Aggregate Data from South Africa," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(12), pages 3355-3376, September.
    • Handle: RePEc:mes:emfitr:v:58:y:2022:i:12:p:3355-3376
    DOI: 10.1080/1540496X.2022.2045940
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    Cited by:

    1. Monique Reid & Pierre Siklos, 2023. "Rationality and biases insights from disaggregated firm level inflation expectations data," Working Papers 11050, South African Reserve Bank.
    2. Chris Loewald & Konstantin Makrelov & Ekaterina Pirozhkova, 2022. "TheshorttermcostsofreducingtrendinflationinSouthAfrica," Working Papers 11029, South African Reserve Bank.

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