EconPapers    
Economics at your fingertips  
 

Relative price variability and the Phillips Curve: evidence from Turkey

Nazif Catik (), Christopher Martin () and A. Özlem Önder ()

Journal of Economic Studies, 2011, vol. 38, issue 5, 546-561

Abstract: Purpose - Using data from Turkey, this paper seeks to investigate whether relative price changes can help to explain the Phillips Curve relationship between inflation and output. Design/methodology/approach - Building on work by Ball and Mankiw, the paper includes measures of the variance and skews of relative price adjustment in an otherwise standard model of the Phillips Curve. It employs a bounds-testing approach based on an ARDL model to establish long-run relationships. It then uses error correction models to analyze short-run dynamics. Findings - No evidence was found for a long-run relationship between inflation and output. However, a long-run relationship is in fact found, once the variance and skew of relative price changes are included as regressors. The error correction model implies plausible short-term dynamics in this case. Originality/value - This paper combines two distinct literatures, on the Phillips Curve and on the distribution of relative price changes, showing that insights from the latter can be essential in constructing coherent models of the Philips Curve.

Keywords: Phillips Curve; Relative price variability; Skewness; Variable costs; Inflation; Turkey (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed

Downloads: (external link)
http://www.emeraldinsight.com/10.1108/014435811111 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
Working Paper: Relative Price Variability and the Philips Curve: Evidence from Turkey (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jespps:v:38:y:2011:i:5:p:546-561

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://www.emeraldinsight.com/jes.htm

Access Statistics for this article

Journal of Economic Studies is currently edited by Professor Mohsen Bahmani-Oskooee

More articles in Journal of Economic Studies from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

 
Page updated 2020-05-09
Handle: RePEc:eme:jespps:v:38:y:2011:i:5:p:546-561