Flattening of the Phillips curve and the role of the oil price: An unobserved component model for the USA and Australia

We used the unobserved component model of Harvey (1989, 2011) to estimate the Phillips curve for the USA and Australia, augmenting it with the oil price. Our results show that while the coefficient of demand pressure and the intercept decreased, the coefficient of the oil price increased. Therefore, the oil price is likely to play a significant role in future inflation rates.

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Year of publication:	2012
Authors:	Paradiso, Antonio ; Rao, B. Bhaskara
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 117.2012, 1, p. 259-262
Publisher:	Elsevier
Subject:	Unobserved component model \| USA \| Australia \| Flattening Phillips curve \| Oil price

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Type of publication:	Article
Classification:	C2 - Econometric Methods: Single Equation Models ; C12 - Hypothesis Testing ; E3 - Prices, Business Fluctuations, and Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011041564