Unemployment and inflation in Ireland: 1926-2012

Stefan Gerlach, Reamonn Lydon () and Rebecca Stuart

No 514, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: Since the 1970s, the overarching view in the literature has been that a Phillips curve relationship did not exist in Ireland prior to the 1979 exchange rate break with Sterling. It was argued that, as a small open economy, prices were determined externally. To test this relationship, we study the determination of inflation between 1926 and 2012, a longer sample period than any previously used. We find that the difference between unemployment and the NAIRU is a significant determinant of inflation both in the full sample and in the subsamples spanning the periods before and after the Sterling parity link.

Keywords: Ireland; historical statistics; inflation; unemployment; import prices (search for similar items in EconPapers)
JEL-codes: E3 E4 N14 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-his and nep-mac
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Related works:
Working Paper: Unemployment and Inflation in Ireland: 1926-2012 (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:514

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