Relative Price Variability and the Philips Curve: Evidence from Turkey
We argue that relative price changes are a key component of the Phillips curve relationship between inflation and output. Building on work by Ball and Mankiw, we propose including measures of the variances and skewness of relative price adjustment in an otherwise standard model of the Phillips curve. We examine the case of Turkey, where distribution of price changes is especially skewed and where the existence of a Phillips curve has been questioned. We have two main findings: (i) inclusion of measures of the distribution of relative price changes improves our understanding of the Phillips curve trade-off; (ii) there is no evidence of such a trade-off if these measures are not included.
|Date of creation:||Jul 2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iibf.ege.edu.tr/economics/|
More information through EDIRC
References listed on IDEAS
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.:
- Holly, Sean, 1997. "Relative Price Dispersion and the Rate of Inflation: The Evidence from Japan," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 206-226.
- Debelle, Guy & Lamont, Owen, 1997.
"Relative Price Variability and Inflation: Evidence from U.S. Cities,"
Journal of Political Economy,
University of Chicago Press, vol. 105(1), pages 132-52, February.
- Guy Debelle & Owen Lamont, 1996. "Relative Price Variability and Inflation: Evidence from US Cities," NBER Working Papers 5627, National Bureau of Economic Research, Inc.
- Jörg Döpke & Christian Pierdzioch, 2001.
"Inflation and the Skewness of the Distribution of Relative Price Changes: Empirical Evidence for Germany,"
Kiel Working Papers
1059, Kiel Institute for the World Economy.
- Jörg Döpke & Christian Pierdzioch, 2003. "Inflation and the Skewness of the Distribution of Relative Price Changes - Empirical Evidence for Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 223(2), pages 136-158.
- A. Ozlem Onder, 2009.
"The stability of the Turkish Phillips curve and alternative regime shifting models,"
Taylor & Francis Journals, vol. 41(20), pages 2597-2604.
- Özlem Önder, 2006. "The Stability Of The Turkish Phillips Curve And Alternative Regime Shifting Models," Working Papers 0602, Ege University, Department of Economics.
- A. Ã–Zlem Ã–Nder, 2004.
"Forecasting Inflation in Emerging Markets by Using the Phillips Curve and Alternative Time Series Models,"
Emerging Markets Finance and Trade,
Taylor & Francis Journals, vol. 40(2), pages 71-82, March.
- A. Özlem Önder, 2004. "Forecasting Inflation in Emerging Markets by Using the Phillips Curve and Alternative Time Series Models," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 40(2), pages 71-82, March.
- Richard De Abreu Lourenco & David Gruen, 1995. "Price Stickiness and Inflation," RBA Research Discussion Papers rdp9502, Reserve Bank of Australia.
When requesting a correction, please mention this item's handle: RePEc:ege:wpaper:0807. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Baris Gök)
If references are entirely missing, you can add them using this form.