The determinants of stagflation in a panel of countries
This paper explores the determinants of stagflation. Three measures are proposed that gauge both the occurrence and the strength of stagflation. We investigate the empirical determinants of these measures, accounting for a range of theoretical hypotheses that have been discussed since the mid-1970s. The results confirm the ambiguity in the influence of oil, although we find clear evidence that adverse supply-shocks enhance the probability and the magnitude of stagflation. However, while stagflation was oil-induced during the 1970s and 1980s, its occurrence in recent decades is strongly affected by monetary policy and labor productivity, indicating a paradigm shift in policy implications. The inevitable policy dilemma, suggested by the empirical persistence of stagflation, may thus be vincible. Yet, while stagflation was more severe during the 1970s and the 1980s, the likelihood of its recurrence turns out to be higher than often thought.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (0931) 31-2901
Fax: (0931) 31-2101
Web page: http://www.vwl.uni-wuerzburg.de/lehrstuehle/vwl4/startseite/
More information through EDIRC
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.:
- Cubitt, Robin P, 1997. " Stagflationary Bias and the Interaction of Monetary Policy and Wages in a Unionized Economy," Public Choice, Springer, vol. 93(1-2), pages 165-78, October.
- William H. Branson & Julio J. Rotemberg, 1991.
"International Adjustment with Wage Rigidity,"
in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 13-44
National Bureau of Economic Research, Inc.
- Branson, William H. & Rotemberg, Julio J., 1980. "International adjustment with wage rigidity," European Economic Review, Elsevier, vol. 13(3), pages 309-332, May.
- William H. Branson & Julio J. Rotemberg, 1981. "International adjustment with wage rigidity," NBER Chapters, in: International Seminar on Macroeconomics, pages 309-332 National Bureau of Economic Research, Inc.
- Lutz Kilian & Bruce Hicks, 2013.
"Did Unexpectedly Strong Economic Growth Cause the Oil Price Shock of 2003–2008?,"
Journal of Forecasting,
John Wiley & Sons, Ltd., vol. 32(5), pages 385-394, 08.
- Hicks, Bruce & Kilian, Lutz, 2009. "Did Unexpectedly Strong Economic Growth Cause the Oil Price Shock of 2003-2008?," CEPR Discussion Papers 7265, C.E.P.R. Discussion Papers.
- James D. Hamilton, 2009.
"Causes and Consequences of the Oil Shock of 2007-08,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 40(1 (Spring), pages 215-283.
- James D. Hamilton, 2009. "Causes and Consequences of the Oil Shock of 2007-08," NBER Working Papers 15002, National Bureau of Economic Research, Inc.
- James D. Hamilton, 2010. "Causes and consequences of the oil shock of 2007–08," CQER Working Paper 2009-02, Federal Reserve Bank of Atlanta.
- Robert B. Barsky & Lutz Kilian, 2001.
"Do We Really Know that Oil Caused the Great Stagflation? A Monetary Alternative,"
NBER Working Papers
8389, National Bureau of Economic Research, Inc.
- Robert B. Barsky & Lutz Kilian, 2002. "Do We Really Know that Oil Caused the Great Stagflation? A Monetary Alternative," NBER Chapters, in: NBER Macroeconomics Annual 2001, Volume 16, pages 137-198 National Bureau of Economic Research, Inc.
- Kilian, Lutz, 2005.
"Exogenous Oil Supply Shocks: How Big Are They and How Much do they Matter for the US Economy?,"
CEPR Discussion Papers
5131, C.E.P.R. Discussion Papers.
- Lutz Kilian, 2008. "Exogenous Oil Supply Shocks: How Big Are They and How Much Do They Matter for the U.S. Economy?," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 216-240, May.
- Nelson, Edward & Nikolov, Kalin, 2004.
"Monetary Policy and Stagflation in the UK,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 36(3), pages 293-318, June.
- Joseph Hilbe, 1994. "Negative binomial regression," Stata Technical Bulletin, StataCorp LP, vol. 3(18).
- Cameron, A Colin & Trivedi, Pravin K, 1986. "Econometric Models Based on Count Data: Comparisons and Applications of Some Estimators and Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 29-53, January.
- Luca Guerrieri & Christopher Erceg & Martin Bodenstein, 2008.
"Oil Shocks and External Adjustment,"
2008 Meeting Papers
945, Society for Economic Dynamics.
- Cameron, A.C. & Windmeijer, F.A.G., 1993.
"R-Squared Measures for Count Data Regression Models with Applications to Health Care Utilization,"
93-24, California Davis - Institute of Governmental Affairs.
- Cameron, A Colin & Windmeijer, Frank A G, 1996. "R-Squared Measures for Count Data Regression Models with Applications to Health-Care Utilization," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(2), pages 209-20, April.
- Hamilton, James D., 2003.
"What is an oil shock?,"
Journal of Econometrics,
Elsevier, vol. 113(2), pages 363-398, April.
- Jeffrey M. Wooldridge, 2001.
"Econometric Analysis of Cross Section and Panel Data,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262232197, June.
- Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, June.
When requesting a correction, please mention this item's handle: RePEc:zbw:wuewwb:117r. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.