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

Antonio Paradiso () and B. Rao

Economics Letters, 2012, vol. 117, issue 1, 259-262

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.

Keywords: Unobserved component model; USA; Australia; Flattening Phillips curve; Oil price (search for similar items in EconPapers)
JEL-codes: C12 C2 E3 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Flattening of the Phillips Curve and the Role of Oil Price: An Unobserved Components Model for the USA and Australia (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:1:p:259-262

DOI: 10.1016/j.econlet.2012.05.022

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