A deep learning approach to estimation of the Phillips curve in South Africa

Gideon du Rand, Hylton Hollander and Dawie van Lill

No wp-2023-79, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: In this study, we provide a comprehensive estimation of the contemporary Phillips curve relationship in the South African economy using a novel deep learning technique. Our approach incorporates multiple measures of economic slack/tightness and inflation expectations, contributing to the debate on the relevance of the Phillips curve in South Africa, where previous findings have been inconclusive. Our analysis reveals that long-run inflation expectations are the primary driver of inflation, with these expectations anchored around 5% historically but declining since the financial crisis.

Keywords: Inflation; Output gap; Monetary policy (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-big, nep-cmp and nep-his
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