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Please use this identifier to cite or link to this item: http://hdl.handle.net/10400.5/2752

Title: Testing for Asymmetry in the Inflation-Unemployment Trade-off: Some Evidence for the USA
Authors: St. Aubyn, Miguel
Keywords: Phillips curve
Kalman filter
state-space models
NAIRU
Issue Date: 2000
Publisher: ISEG – Departamento de Economia
Citation: St. Aubyn, Miguel. 2000. "Testing for Asymmetry in the Inflation-Unemployment Trade-off: Some Evidence for the USA". Instituto Superior de Economia e Gestão - DE Working papers nº 5-2000/DE/UECE
Series/Report no.: DE Working papers;nº 5-2000/DE/UECE
Abstract: Two sources of asymmetry in the Phillips curve are considered: the "capacity constraint hypothesis" and downward rigidity on wages and/or prices. The short run trade-off between inflation changes and the unemployment gap is modeled in a state-space framework that allows for time variation in both the NAIRU and the trade-off parameter. Empirical evidence for the US using the Kalman filter favors convexity of the Phillips curve, the trade¬off depending positively on the unemployment gap and on inflation changes. The two sources of asymmetry produce almost equivalent observational models, so it is not possible to distinguish one from the other.
URI: http://hdl.handle.net/10400.5/2752
ISSN: 0874-4548
Publisher version: https://aquila1.iseg.utl.pt/aquila/getFile.do?method=getFile&fileId=23809
Appears in Collections:UECE - Documentos de Trabalho / UECE - Working Papers
DE - Documentos de trabalho / Working Papers

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