IDEAS home Printed from https://ideas.repec.org/p/hhs/umnees/0475.html
   My bibliography  Save this paper

The Efficacy and Cost of Regime Shifts in Inflation Policies: Evidence from New Zealand and Sweden

Author

Listed:
  • Daunfeldt, Sven-Olov

    () (Department of Economics, Umeå University)

  • de Luna, Xavier

    (University College)

Abstract

In this paper a comparative study of the regime shift in inflation policies in New Zealand and Sweden is performed. We use a non-parametric regression method to decompose the inflation time series into three components of variation: a long-term trend, a medium-term (cyclical and transient variations) trend and a short-term shocks component. This allows us to study the transition process from the high inflation characterizing the end of the seventies and the eighties to the low inflation observed during the nineties. We find that in New Zealand, although it is initially delayed, the decrease in inflation happens at a faster pace than in Sweden. This may indicate that reforms were more efficient in New Zealand. We also show a clear link between the rising unemployment and the transition from high to low inflation. Furthermore, while in New Zealand a downward adjustment of the unemployment rate happens directly after the transition period, in Sweden there seems to be persistence in high unemployment.

Suggested Citation

  • Daunfeldt, Sven-Olov & de Luna, Xavier, 1998. "The Efficacy and Cost of Regime Shifts in Inflation Policies: Evidence from New Zealand and Sweden," Umeå Economic Studies 475, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0475
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carlos Santos & Maria Alberta Oliveira, 2010. "Assessing French inflation persistence with impulse saturation break tests and automatic general-to-specific modelling," Applied Economics, Taylor & Francis Journals, vol. 42(12), pages 1577-1589.
    2. Sven-Olov Daunfeldt & Jörgen Hellström & Mats Landström, 2013. "Why Do Politicians Implement Central Bank Independence Reforms?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(4), pages 427-438, December.
    3. Chatterjee, Srikanta & Dalziel, Paul & Daunfeldt, Sven-Olov & Podder, Nripesh, 2008. "Income Inequality and Transformation of the Welfare State: A Comparative Study of the Reforms in New Zealand and Sweden," HUI Working Papers 20, HUI Research.
    4. Daunfeldt, Sven-Olov & de Luna, Xavier, 2002. "Central Bank Independence and Price Stability: Evidence from 23 OECD-countries," Umeå Economic Studies 589, Umeå University, Department of Economics, revised 12 Jun 2003.

    More about this item

    Keywords

    Inflation regimes; unemployement; non-parametric regression; components of variation;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hhs:umnees:0475. 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: (David Skog). General contact details of provider: http://edirc.repec.org/data/inumuse.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.