Revisiting the empirical existence of the Phillips Curve for India

B Karan Singh, A Kanakaraj and T.o Sridevi

MPRA Paper from University Library of Munich, Germany

Abstract: This paper revisits the empirical existence of the Phillips curve in the Indian context. To estimate the Phillips curve we need two variables – inflation and the output gap. In the case of India, incorrect measurement of both variables causes much difficulty in estimating the Phillipscurve. We use a non-linear Kalman filter approach to estimate the output gap and find that the Kalman filter estimate captures all the dynamics of the economy. Our results show that after taking supply shocks into consideration, there is clear evidence as to the existence of the Phillips curve in India for recent years.

Keywords: Kalman Filter; Output Gap; Inflation (search for similar items in EconPapers)
JEL-codes: A21 C32 E31 E50 (search for similar items in EconPapers)
Date: 2010-02-09
New Economics Papers: this item is included in nep-cba and nep-mac
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Citations: View citations in EconPapers (1)

Published in Journal of Asian Economics 22.2(2011): pp. 1-20

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Related works:
Journal Article: Revisiting the empirical existence of the Phillips curve for India (2011)
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