The relationship between dynamic price and dynamic unemployment: the case of the Central European-3 and the Baltic Tigers

Luis Dumlao

International Journal of Economic Sciences, 2014, vol. 2014, issue 2, 20-42

Abstract: Convention specifies the relationship between price and unemployment in terms of the Phillips curve (PC) where inflation and the rate of unemployment are correlated. This paper uses a variant of the PC that is more consistent with the relationship between price and output as depicted in the aggregate supply (AS) curve. The relationship between price and unemployment using convention and its variant is tested on Poland, the Czech Republic, Hungary, Estonia, Latvia, Lithuania and the pooled data. The Expectations Augmented (EA) is able to track a negative relation between inflation and unemployment better than the New Keynesian (NK) is able. Within the EA runs, the convention is able to track the same negative relation better than the variant, but one has to be cautious given the implied results.

Keywords: NA; employment; unemployment; inflation; incomes policy; price policy; Phillips curve; Central Europe; Baltic Tigers (search for similar items in EconPapers)
JEL-codes: E24 E31 E64 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.vse.cz/ijes/11 (text/html)
free of charge

Related works:
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:prg:jnljes:v:2014:y:2014:i:2:id:11:p:20-42

Ordering information: This journal article can be ordered from
IISES, Kamerunska 607/1, Prague, Czech Republic
http://www.vse.cz/ijes/

Access Statistics for this article

International Journal of Economic Sciences is currently edited by Klara Cermakova

More articles in International Journal of Economic Sciences from Prague University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().