Asymmetric output cost of lowering inflation: empirical evidence for Canada
Hyeon-seung Huh and
Canadian Journal of Economics, 2002, vol. 35, issue 2, 218-238
A strand of theoretical and empirical evidence in the literature suggests non-linearity in the output-inflation relationship, viz. a non-linear Phillips curve. We develop a VAR model of output, inflation, and terms of trade augmented with logistic smooth transition autoregression specifications. Empirically, the model captures non-linear features present in the data. Output costs of reducing inflation vary, depending on the economy, size of inflation change, and whether policy makers seek to disinflate or prevent inflation from rising. Thus, inferences based on the conventional linear Phillips curve may provide misleading signals about the cost of lowering inflation and the appropriate policy stance.
JEL-codes: C32 E52 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed
Downloads: (external link)
access restricted to subscribers
Journal Article: Asymmetric output cost of lowering inflation: empirical evidence for Canada (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cje:issued:v:35:y:2002:i:2:p:218-238
Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php
Access Statistics for this article
Canadian Journal of Economics is currently edited by Katherine Cuff
More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().