Open AccessEmpirics of The Traditional Phillips Curve: Evidence From 1930-2016
Author(s) -
Muhammad Mustafa,
Atiqur Rahman
Publication year - 1970
Publication title -
journal of business strategies
Language(s) - English
Resource type - Journals
eISSN - 2162-6901
pISSN - 0887-2058
DOI - 10.54155/jbs.34.2.97-110
Subject(s) - econometrics , inflation (cosmology) , short run , phillips curve , economics , order (exchange) , mathematics , statistics , keynesian economics , macroeconomics , monetary policy , physics , finance , theoretical physics
This study revisits the trade-off relationship between inflation andunemployment rates for the USA, as observed by the traditional Philips curve.Annual data are used from 1930 to 2016. The ARDL Bounds Testing approach isapplied accompanying efficient unit roots testing [(DF-GLS) and (Ng-Perron) tests]and the determination of the order of integration of the variables in levels. TheARDL Bounds testing estimates confirm co-integration between the above variables.The estimates of error-correction model (ECM) clearly support the existence of thetraditional Philips curve for the long run, but subdued for the short run. However,there is evidence of short-run interactive feedback effect between the variables.