The Possible Unemployment Cost of Average Inflation Below a Credible Target. A Replication Study of Svensson (American Economic Journal: Macroeconomics, 2015)

Ramy Oraby

Journal of Comments and Replications in Economics (JCRE), 2022, vol. 1, 1-21

Abstract: This paper replicates the main analysis of Svensson (2015) with some expansion to the original analysis, mainly for the United States. Overall, the replication exercise successfully confirms the conclusions of Svensson (2015). In both Sweden and the United States, empirical evidence sup- ports the existence of a non-vertical long run Phillips curve. The slope of the long run Phillips curve recorded -0.75 in Sweden and -0.23 in the United States. While the average inflation rate in the United States was very close to its targeted level, the average inflation rate in Sweden was 0.6 per- centage points below its targeted level over the sample period. The deviation of inflation rate from its targeted level in Sweden resulted in an unemployment cost equivalent to 0.8 percentage points over the sample period where the average unemployment rate recorded 7.4 percent compared with an estimated 6.6 percent had the average inflation rate been at its targeted level.

Keywords: Monetary Policy; Central Banks; Phillips Curve; Inflation; Expectations; Unemployment; Replication Study (search for similar items in EconPapers)
JEL-codes: D84 E24 E31 E52 E58 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/253653/1/JCRE-2022-2.pdf (application/pdf)

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:zbw:jcreco:253653

DOI: 10.18718/81781.24

Access Statistics for this article

Journal of Comments and Replications in Economics (JCRE) is currently edited by David A. Jaeger, Maren Duvendack, W. Robert Reed

More articles in Journal of Comments and Replications in Economics (JCRE) from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().