Estimated Trade-Offs Between Unemployment and Inflation
AbstractThree models of price and wage behavior are estimated and tested in this paper. Model 1 is one in which the long-run trade-off between unemployment and inflation is in terms of price levels; Model 2 is one in which the trade-off is in terms of rates of change; and Model 3 is one in which there is no long-run trade-off. The evidence favors Model 1 over Models 2 and 3. The comparison between Models 2 and 3 is inconclusive. The short-run trade-offs are greater for Model 1 than for Models 2 and 3. The fact that Model 3 did not do particularly well is evidence against the Friedman-Phelps proposition of no long-run trade-off.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 707.
Length: 32 pages
Date of creation: Jun 1984
Date of revision:
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- Ray C. Fair, 1984. "Estimated tradeoffs between unemployment and inflation," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 57-96.
- Ray C. Fair, 1984. "Estimated Trade-Offs Between Unemployment and Inflation," NBER Working Papers 1377, National Bureau of Economic Research, Inc.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Estimating the Expected Predictive Accuracy of Econometric Models,"
Cowles Foundation Discussion Papers
480, Cowles Foundation for Research in Economics, Yale University.
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- George L. Perry, 1980. "Inflation in Theory and Practice," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 11(1, Tenth ), pages 207-260.
- Robert J. Gordon & Stephen R. King, 1982. "The Output Cost of Disinflation in Traditional and Vector Autoregressive Models," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 13(1), pages 205-244.
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