IDEAS home Printed from https://ideas.repec.org/a/spr/snbeco/v5y2025i6d10.1007_s43546-025-00829-4.html
   My bibliography  Save this article

Empirical analysis of the mixed results of the Phillips curve in Tunisia: ARDL nexus NARDL

Author

Listed:
  • Lotfi Masmoudi

    (University of Sfax)

  • Rima Aloulou

    (University of Sfax)

  • Kamel Helali

    (University of Sfax)

Abstract

This article aims to investigate the nature and characteristics of the correlation between inflation and Tunisia’s unemployment rate from 1970 to 2020. Tunisia has experienced one of the highest unemployment and inflation rates in the Mediterranean Area. The empirical study demonstrates a long-term equilibrium between inflation and unemployment using the autoregressive distributed lag model (ARDL) and the nonlinear autoregressive distributed lag model (NARDL). The ARDL model’s results indicate that the unemployment rate is significantly and negatively impacted by the inflation rate, with a value of -0.526. However, based on the NARDL model’s results, we observe a long-term asymmetric effect. More precisely, we observe a positive and significant impact of low unemployment, evaluated at 0.581, and a negative and significant effect of high unemployment, evaluated at -0.695. The rigidity of labor market regulations has led to distortions that hinder the Tunisian labor market’s smooth operation. It is recommended that these “dysfunctions” be eliminated to increase the efficiency of the labor market’s operation. The quest for greater labor flexibility will make Tunisia’s labor market mechanisms function usually and efficiently.

Suggested Citation

  • Lotfi Masmoudi & Rima Aloulou & Kamel Helali, 2025. "Empirical analysis of the mixed results of the Phillips curve in Tunisia: ARDL nexus NARDL," SN Business & Economics, Springer, vol. 5(6), pages 1-24, June.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:6:d:10.1007_s43546-025-00829-4
    DOI: 10.1007/s43546-025-00829-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s43546-025-00829-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s43546-025-00829-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tiff Macklem, 1997. "Capacity constraints, price adjustment, and monetary policy," Bank of Canada Review, Bank of Canada, vol. 1997(Spring), pages 39-56.
    2. Mary C. Daly & Bart Hobijn, 2014. "Downward Nominal Wage Rigidities Bend the Phillips Curve," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(S2), pages 51-93, October.
    3. Ball, Laurence & Mankiw, N Gregory, 1994. "Asymmetric Price Adjustment and Economic Fluctuations," Economic Journal, Royal Economic Society, vol. 104(423), pages 247-261, March.
    4. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    5. Granger, Clive W.J. & YOON, GAWON, 2002. "Hidden Cointegration," University of California at San Diego, Economics Working Paper Series qt9qn5f61j, Department of Economics, UC San Diego.
    6. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    7. Laxton, Douglas & Rose, David & Tambakis, Demosthenes, 1999. "The U.S. Phillips curve: The case for asymmetry," Journal of Economic Dynamics and Control, Elsevier, vol. 23(9-10), pages 1459-1485, September.
    8. Guy Debelle & James Vickery, 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.
    9. George A. Akerlof & William R. Dickens & George L. Perry, 1996. "The Macroeconomics of Low Inflation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 1-76.
    10. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    11. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
    12. Renaud St-Cyr, 2018. "Non-linéarité de la courbe de Phillips : un survol de la littérature," Staff Analytical Notes 2018-3, Bank of Canada.
    13. Figlewski, Stephen & Wachtel, Paul, 1981. "The Formation of Inflationary Expectations," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 1-10, February.
    14. Peter Romilly & Haiyan Song & Xiaming Liu, 2001. "Car ownership and use in Britain: a comparison of the empirical results of alternative cointegration estimation methods and forecasts," Applied Economics, Taylor & Francis Journals, vol. 33(14), pages 1803-1818.
    15. Robert J. Gordon, 1997. "The Time-Varying NAIRU and Its Implications for Economic Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 11-32, Winter.
    16. Anton Brender & Florence Pisani, 2010. "La crise de la finance globalisée," Économie et Statistique, Programme National Persée, vol. 438(1), pages 85-104.
    17. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    18. Mr. Peter B. Clark & Mr. Douglas Laxton & David Rose, 1995. "Capacity Constraints, Inflation and the Transmission Mechanism: Forward-Looking Versus Myopic Policy Rules," IMF Working Papers 1995/075, International Monetary Fund.
    19. Pierre-Richard Agénor & Peter J. Montiel, 2015. "Development Macroeconomics Fourth edition," Economics Books, Princeton University Press, edition 4, number 10494.
    20. Zarnowitz, Victor, 1985. "Rational Expectations and Macroeconomic Forecasts," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(4), pages 293-311, October.
    21. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    22. Paul Mylonas & Sebastian Schich, 1999. "The Use of Financial Market Indicators by Monetary Authorities," OECD Economics Department Working Papers 223, OECD Publishing.
    23. François Geerolf, 2021. "La courbe de Phillips n’est pas celle que vous croyez," La Lettre du CEPII, CEPII research center, issue 417.
    24. Guy Debelle & Douglas Laxton, 1997. "Is the Phillips Curve Really a Curve? Some Evidence for Canada, the United Kingdom, and the United States," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 249-282, June.
    25. Jeremy J. Nalewaik, 2016. "Non-Linear Phillips Curves with Inflation Regime-Switching," Finance and Economics Discussion Series 2016-078, Board of Governors of the Federal Reserve System (U.S.).
    26. Dolado, Juan J. & Maria-Dolores, Ramon & Naveira, Manuel, 2005. "Are monetary-policy reaction functions asymmetric?: The role of nonlinearity in the Phillips curve," European Economic Review, Elsevier, vol. 49(2), pages 485-503, February.
    27. Joseph Stiglitz, 1997. "Reflections on the Natural Rate Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 3-10, Winter.
    28. Katrakilidis, Constantinos & Trachanas, Emmanouil, 2012. "What drives housing price dynamics in Greece: New evidence from asymmetric ARDL cointegration," Economic Modelling, Elsevier, vol. 29(4), pages 1064-1069.
    29. Martin Evans & Paul Wachtel, 1993. "Inflation regimes and the sources of inflation uncertainty," Proceedings, Federal Reserve Bank of Cleveland, pages 475-520.
    30. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    31. Kumar, Anil & M. Orrenius, Pia, 2016. "A closer look at the Phillips curve using state-level data," Journal of Macroeconomics, Elsevier, vol. 47(PA), pages 84-102.
    32. Eugene Msizi Buthelezi, 2023. "Impact of Inflation in Different States of Unemployment: Evidence with the Phillips Curve in South Africa from 2008 to 2022," Economies, MDPI, vol. 11(1), pages 1-12, January.
    33. François Geerolf & Thomas Grjebine, 2020. "Rééquilibrage de la zone euro : plus facile avec le bon diagnostic !," La Lettre du CEPII, CEPII research center, issue 411.
    34. Stiglitz, Joseph E, 1984. "Price Rigidities and Market Structure," American Economic Review, American Economic Association, vol. 74(2), pages 350-355, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Renaud St-Cyr, 2018. "Non-linéarité de la courbe de Phillips : un survol de la littérature," Staff Analytical Notes 2018-3, Bank of Canada.
    2. Marco Gross & Willi Semmler, 2019. "Mind the Output Gap: The Disconnect of Growth and Inflation during Recessions and Convex Phillips Curves in the Euro Area," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 81(4), pages 817-848, August.
    3. Saglio, Sophie & López-Villavicencio, Antonia, 2012. "Introducing price-setting behaviour in the Phillips Curve: the role of nonlinearities," MPRA Paper 46646, University Library of Munich, Germany.
    4. Apergis, Nicholas & Gangopadhyay, Partha, 2020. "The asymmetric relationships between pollution, energy use and oil prices in Vietnam: Some behavioural implications for energy policy-making," Energy Policy, Elsevier, vol. 140(C).
    5. Eliasson, Ann-Charlotte, 2001. "Is the Short-run Phillips Curve Nonlinear? Empirical Evidence for Australia, Sweden and the United States," Working Paper Series 124, Sveriges Riksbank (Central Bank of Sweden).
    6. David Mayes & Matti Viren, 2002. "Asymmetry and the Problem of Aggregation in the Euro Area," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 29(1), pages 47-73, March.
    7. Nurudeen Abu, 2019. "Inflation and Unemployment Trade-off: A Re-examination of the Phillips Curve and its Stability in Nigeria," Contemporary Economics, Vizja University, vol. 13(1), March.
    8. Adeel Saleem & Maqbool H. Sial & Ahmed Raza Cheema, 2023. "Does an asymmetric nexus exist between exports and economic growth in Pakistan? Recent evidence from a nonlinear ARDL approach," Economic Change and Restructuring, Springer, vol. 56(1), pages 297-326, February.
    9. Chantal Dupasquier & Nicholas Ricketts, 1998. "Non-Linearities in the Output-Inflation Relationship: Some Empirical Results for Canada," Staff Working Papers 98-14, Bank of Canada.
    10. Sarah Lein & Eva Koeberl, 2009. "Capacity utilisation, constraints and price adjustments under the microscope," KOF Working papers 09-239, KOF Swiss Economic Institute, ETH Zurich.
    11. Fousekis, Panos & Katrakilidis, Constantinos & Trachanas, Emmanouil, 2016. "Vertical price transmission in the US beef sector: Evidence from the nonlinear ARDL model," Economic Modelling, Elsevier, vol. 52(PB), pages 499-506.
    12. Antonia López-Villavicencio & Valérie Mignon, 2013. "Nonlinearity of the inflation-output trade-off and time-varying price rigidity," Working Papers 2013-02, CEPII research center.
    13. Shawkat Hammoudeh & Amine Lahiani & Duc Khuong Nguyen & Ricardo M. Sousa, 2014. "Asymmetric and nonlinear passthrough of energy prices to CO2 emission allowance prices," Working Papers 2014-82, Department of Research, Ipag Business School.
    14. Kumar, Anil & M. Orrenius, Pia, 2016. "A closer look at the Phillips curve using state-level data," Journal of Macroeconomics, Elsevier, vol. 47(PA), pages 84-102.
    15. repec:zbw:bofrdp:2000_011 is not listed on IDEAS
    16. Alberto Musso & Livio Stracca & Dick van Dijk, 2009. "Instability and Nonlinearity in the Euro-Area Phillips Curve," International Journal of Central Banking, International Journal of Central Banking, vol. 5(2), pages 181-212, June.
    17. Guy Debelle & James Vickery, 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.
    18. repec:ipg:wpaper:2014-082 is not listed on IDEAS
    19. Assad Ullah & Xinshun Zhao & Muhammad Abdul Kamal & Jiajia Zheng, 2022. "Environmental regulations and inward FDI in China: Fresh evidence from the asymmetric autoregressive distributed lag approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1340-1356, January.
    20. Jammazi, Rania & Lahiani, Amine & Nguyen, Duc Khuong, 2015. "A wavelet-based nonlinear ARDL model for assessing the exchange rate pass-through to crude oil prices," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 34(C), pages 173-187.
    21. David Mayes & Matti Viren, 2002. "Asymmetry and the Problem of Aggregation in the Euro Area," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 29(1), pages 47-73, March.
    22. Shahbaz, Muhammad, 2013. "Linkages between inflation, economic growth and terrorism in Pakistan," Economic Modelling, Elsevier, vol. 32(C), pages 496-506.

    More about this item

    Keywords

    Phillips curve; Inflation; Unemployment; ARDL; NARDL;
    All these keywords.

    JEL classification:

    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:snbeco:v:5:y:2025:i:6:d:10.1007_s43546-025-00829-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.