The Phillips Curve – Uk Case

Inflation, as a monetary phenomenon, is viewed by monetarists occurring as a result of supply of currency growing faster than the economic output. Research endeavours aimed at understanding the inflationary process among countries have witnessed major advancements in modelling short-term inflation dynamics”. The literature on the Phillips Curve, which is the “modern view of inflationary process”, continues to increase. This paper, therefore, provides an empirical analysis of testing the Phillips Curve in the case of the UK. An econometric regression of the traditional Phillips Curve, the New Keynesian Phillips Curve and the New Hybrid Keynesian Phillips Curve has been conducted, using the UK time-series data starting from 1956 to 2010. I have used the output gap, Hodrick-Prescot Filter and Generalized Methods of Moments measures to estimate the results. Some of the results are quite robust, whereas the NKPC and the hybrid NKPC do not fit the UK data.

  The Phillips Curve – Uk Case (1.0 MiB, 3,287 hits)

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