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Intracountry Evidence on the Lucas Variance Hypothesis

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  • Katsimbris, George M

Abstract

Intracountry time-series evidence for a sample of thirty-nine countries fails to provide strong support for the basic implications of the Lucas aggregate supply model, namely, there exists a negative relationship between the output-inflation trade-off and the variability of both nominal aggregate demand. The findings differ from those of most of the previous cross-sectional studies, which found support for the Lucas variance hypothesis, but are consistent with R. T. Froyen and R. N. Waud's. Copyright 1990 by Oxford University Press.

Suggested Citation

  • Katsimbris, George M, 1990. "Intracountry Evidence on the Lucas Variance Hypothesis," Economic Inquiry, Western Economic Association International, vol. 28(4), pages 756-773, October.
    • Handle: RePEc:oup:ecinqu:v:28:y:1990:i:4:p:756-73
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    Cited by:

    1. Rongrong Sun, 2014. "Nominal rigidity and some new evidence on the New Keynesian theory of the output-inflation tradeoff," International Economics and Economic Policy, Springer, vol. 11(4), pages 575-597, December.
    2. Mark J. Holmes, 2000. "The Output-Inflation Trade-off in African Less Developed Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 25(1), pages 41-55, June.

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