Econometric Analysis of the Modified Phillips Curve in Finland 1988–2009

Teodor Sedlarski and Angel Eremiev
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Angel Eremiev: Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski

Yearbook of the Faculty of Economics and Business Administration, Sofia University, 2013, vol. 11, issue 1, 227-251

Abstract: In this article we apply basic econometric tools to examine the inverse relationship between unemployment and inflation rates known as the Phillips curve. The object of our study is the Finnish economy in the period 1988–2009. We introduce and analyse two regression models, linear and reciprocal, to estimate the level of correlation between both variables. As the reciprocal model yields better results we test hypotheses about its coefficients. The interpretation of the findings about Finland is supportive of the traditional trade-off implied by the Phillips curve between unemployment and inflation rates.

Keywords: Phillips curve; unemployment; inflation; wages; NAIRU (search for similar items in EconPapers)
JEL-codes: B23 C12 C13 C22 C52 E24 J64 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:sko:yrbook:v:11:y:2013:i:1:p:227-251

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