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Non-Stationary Inflation and Panel Estimates of United States Short and Long-run Phillips curves

  • Bill Russell

This paper argues that because United States inflation has been nonstationary over the past 5 decades the body of empirical research that proceeds assuming explicitly or implicitly that inflation is stationary with constant mean is largely invalid. Using 50 years of US inflation data the standard results in the Phillips curve literature are shown to be due to unaccounted shifts in the mean rates of inflation over the period. We then proceed to estimate short and long-run Phillips curves for the United States using time series panel data techniques which account for these shifts in mean.

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File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_200.pdf
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Paper provided by Economic Studies, University of Dundee in its series Dundee Discussion Papers in Economics with number 200.

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Length: 43 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:dun:dpaper:200
Contact details of provider: Postal: Dundee, DD1 4HN
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