The Phillips Curve in Australia

David Gruen, Adrian Rodney Pagan and Christopher Thompson
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David Gruen: Reserve Bank of Australia
Christopher Thompson: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: In this paper we discuss the development of Phillips curves in Australia over the forty years since Phillips first estimated one using Australian data. We examine the central issues faced by researchers estimating Australian Phillips curves. These include the distinction between the short and long-run trade-offs between inflation and unemployment, and the changing level of the non-accelerating inflation rate of unemployment (NAIRU), particularly in the 1970s. We estimate Phillips curves for prices and unit labour costs in Australia over the past three decades. These Phillips curves allow the NAIRU to change through time, and include a role for import prices and 'speed-limit' effects. The paper concludes by presenting an extended discussion of the changing role of the Phillips curve in the intellectual framework used to analyse inflation within the Reserve Bank of Australia over the past three decades.

Keywords: Phillips curve; inflation; unemployment; monetary policy (search for similar items in EconPapers)
JEL-codes: E24 E31 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-ltv
Date: 1999-01
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Journal Article: The Phillips curve in Australia (1999)
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