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Phillips curves and openness: New evidence from selected Asian economies

Author

Listed:
  • Fumitaka Furuoka

    () (Universiti Malaysia Sabah)

  • Chong Mun Ho

    () (Universiti Malaysia Sabah)

Abstract

This paper chooses three Asian countries (Japan, South Korea and Malaysia) as case studies to examine the relationship between the Phillips curve and openness. The justification for the choice of these countries is that Japan is a moderately open economy while Malaysia is a highly open economy. South Korea is in-between these two extremes. The main finding of the present study is that as a country opens up to global market by increasing the amount of imports, the slope coefficient of the Phillips curve becomes smaller. In other words, the findings suggest that the Phillips curve tends to be flatter in more open economies.

Suggested Citation

  • Fumitaka Furuoka & Chong Mun Ho, 2009. "Phillips curves and openness: New evidence from selected Asian economies," Economics Bulletin, AccessEcon, vol. 29(1), pages 253-264.
  • Handle: RePEc:ebl:ecbull:eb-08e20015
    as

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    References listed on IDEAS

    as
    1. David Romer, 1993. "Openness and Inflation: Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 108(4), pages 869-903.
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    3. Debelle, Guy & Vickery, James, 1998. "Is the Phillips Curve a Curve? Some Evidence and Implications for Australia," The Economic Record, The Economic Society of Australia, vol. 74(227), pages 384-398, December.
    4. Loungani, Prakash & Razin, Assaf & Yuen, Chi-Wa, 2001. "Capital mobility and the output-inflation tradeoff," Journal of Development Economics, Elsevier, vol. 64(1), pages 255-274, February.
    5. John DiNardo & Mark P. Moore, 1999. "The Phillips Curve is Back? Using Panel Data to Analyze the Relationship Between Unemployment and Inflation in an Open Economy," NBER Working Papers 7328, National Bureau of Economic Research, Inc.
    6. Dave Turner & Elena Seghezza, 1999. "Testing for a Common OECD Phillips Curve," OECD Economics Department Working Papers 219, OECD Publishing.
    7. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    8. Vincent Hogan, 1998. "Explaining the Recent Behavior of Inflation and Unemployment in the United States," IMF Working Papers 98/145, International Monetary Fund.
    9. Temple, Jonathan, 2002. "Openness, Inflation, and the Phillips Curve: A Puzzle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(2), pages 450-468, May.
    10. Laurence Ball & N. Gregory Mankiw, 2002. "The NAIRU in Theory and Practice," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 115-136, Fall.
    11. Shadman-Mehta, Fatemeh, 2001. "A Re-evaluation of the Relation between Wages and Unemployment in the United Kingdom," Economica, London School of Economics and Political Science, vol. 68(272), pages 567-585, November.
    12. King, Robert G. & Watson, Mark W., 1994. "The post-war U.S. phillips curve: a revisionist econometric history," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 41(1), pages 157-219, December.
    13. Robert A. Hart, 2003. "Overtime Working, The Phillips Curve And The Wage Curve: British Engineering, 1926-66," Manchester School, University of Manchester, vol. 71(2), pages 97-112, March.
    14. Mark A. Wynne & Erasmus K. Kersting, 2007. "Openness and inflation," Staff Papers, Federal Reserve Bank of Dallas, issue Apr.
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    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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