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

Antonio Paradiso; B. Bhaskara Rao

doi:10.1016/j.econlet.2012.05.022

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

Antonio Paradiso, B. Bhaskara Rao

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	259-262
Number of pages	4
Journal	Economics Letters
Volume	117
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2012.05.022
Publication status	Published - 2012

Keywords

Australia
Phillips curve
United States of America
petroleum
prices
unobserved component model

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10.1016/j.econlet.2012.05.022

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title = "Flattening of the Phillips curve and the role of the oil price : an unobserved component model for the USA and Australia",

abstract = "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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author = "Antonio Paradiso and Rao, {B. Bhaskara}",

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AU - Paradiso, Antonio

AU - Rao, B. Bhaskara

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N2 - 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.

AB - 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.

KW - Australia

KW - Phillips curve

KW - United States of America

KW - petroleum

KW - prices

KW - unobserved component model

UR - http://handle.uws.edu.au:8081/1959.7/517074

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DO - 10.1016/j.econlet.2012.05.022

M3 - Article

SN - 0165-1765

VL - 117

SP - 259

EP - 262

JO - Economics Letters

JF - Economics Letters

IS - 1

ER -

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

Abstract

Keywords

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