Non-Linearities in the Output-Inflation Relationship: Some Empirical Results for Canada

Chantal Dupasquier and Nicholas Ricketts

Staff Working Papers from Bank of Canada

Abstract: This paper analyzes the short-run dynamic process of inflation in Canada and examines whether a systematic variation in the relationship between inflation and output can be detected over time. In the theoretical literature, different models of price-setting behaviour predict that the slope of the Phillips curve will be a function of macroeconomic conditions, implying a time-varying sacrifice ratio. Evidence for four different types of asymmetry is presented in the context of short-run Phillips curves estimated in a state-space framework. The results suggest that there is significant time variation in the trade-off in Canada, but that it is difficult to distinguish definitively among the possible models generating the non-linearity.

Keywords: Inflation; Productivity (search for similar items in EconPapers)
Pages: 31 pages
Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
https://www.bankofcanada.ca/wp-content/uploads/2010/05/wp98-14.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:bca:bocawp:98-14

Access Statistics for this paper

More papers in Staff Working Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().