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Unemployment and inflation in Ireland: 1926–2012


  • Stefan Gerlach

    () (Central Bank of Ireland)

  • Reamonn Lydon

    () (Central Bank of Ireland)

  • Rebecca Stuart

    () (Central Bank of Ireland)


Abstract Since the 1970s, the overarching view in the literature has been that a Phillips curve relationship did not exist in Ireland prior to the 1979 exchange rate break with Sterling. It was argued that, as a small open economy, prices were determined externally. To test this relationship, we study the determination of inflation between 1926 and 2012, a longer sample period than any previously used. We find that the difference between unemployment and the NAIRU is a significant determinant of inflation both in the full sample and in the subsamples spanning the periods before and after the Sterling parity link.

Suggested Citation

  • Stefan Gerlach & Reamonn Lydon & Rebecca Stuart, 2016. "Unemployment and inflation in Ireland: 1926–2012," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 10(3), pages 345-364, September.
  • Handle: RePEc:spr:cliomt:v:10:y:2016:i:3:d:10.1007_s11698-015-0134-1
    DOI: 10.1007/s11698-015-0134-1

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    References listed on IDEAS

    1. Meyler, Aidan, 1999. "The Non-Accelerating Inflation Rate of Unemployment (NAIRU) in a Small Open Economy: The Irish Context," Research Technical Papers 5/RT/99, Central Bank of Ireland.
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    More about this item


    Ireland; Historical statistics; Inflation; Unemployment; Import prices;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-


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