(This abstract was borrowed from another version of this item.)"> (This abstract was borrowed from another version of this item.)">
[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/moneco/v44y1999i2p223-258.html
   My bibliography  Save this article

The Phillips curve in Australia

Author

Listed:
  • Gruen, David
  • Pagan, Adrian
  • Thompson, Christopher
Abstract
In this paper we discuss the development of Phillips curves in Australia over the forty years since Phillips first estimated one using Australian data. We examine the central issues faced by researchers estimating Australian Phillips curves. These include the distinction between the short and long-run trade-offs between inflation and unemployment, and the changing level of the non-accelerating inflation rate of unemployment (NAIRU), particularly in the 1970s. We estimate Phillips curves for prices and unit labour costs in Australia over the past three decades. These Phillips curves allow the NAIRU to change through time, and include a role for import prices and ‘speed-limit’ effects. The paper concludes by presenting an extended discussion of the changing role of the Phillips curve in the intellectual framework used to analyse inflation within the Reserve Bank of Australia over the past three decades.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gruen, David & Pagan, Adrian & Thompson, Christopher, 1999. "The Phillips curve in Australia," Journal of Monetary Economics, Elsevier, vol. 44(2), pages 223-258, October.
    • Handle: RePEc:eee:moneco:v:44:y:1999:i:2:p:223-258
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304-3932(99)00024-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Challen, D W & Hagger, A J, 1975. "Another Look at Australia's Inflation-Unemployment Trade-Offs," Australian Economic Papers, Wiley Blackwell, vol. 14(25), pages 137-153, December.
    2. Michael G. Kirby, 1981. "An Investigation of the Specification and Stability of the Australian Aggregate Wage Equation," The Economic Record, The Economic Society of Australia, vol. 57(1), pages 35-46, March.
    3. Volker Wieland, "undated". "Monetary Policy and Uncertainty about the Natural Unemployment Rate," Computing in Economics and Finance 1997 11, Society for Computational Economics.
    4. Mardi Dungey & John Pitchford, 1998. "Prospects for Output and Employment Growth with Steady Inflation," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    5. de Brouwer, Gordon & Ericsson, Neil R, 1998. "Modeling Inflation in Australia," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(4), pages 433-449, October.
    6. Ian J. Macfarlane, 1989. "Policy targets and operating procedures: the Australian case," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 143-159.
    7. Jeremy Smith & Chris Murphy, 1994. "Macroeconomic Fluctuations in the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 70(209), pages 133-148, June.
    8. Jeff Borland & Steven Kennedy, 1998. "Dimensions, Structure and History of Australian Unemployment," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    9. Guy Debelle & James Vickery, 1998. "Is the Phillips Curve A Curve? Some Evidence and Implications for Australia," The Economic Record, The Economic Society of Australia, vol. 74(227), pages 384-398, December.
    10. Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-384, March.
    11. Evan F. Koenig & Robert Leeson & George A. Kahn, 2012. "Introduction," Book Chapters, in: Evan F. Koenig & Robert Leeson & George A. Kahn (ed.), The Taylor Rule and the Transformation of Monetary Policy, chapter 1, Hoover Institution, Stanford University.
    12. Nevile, J W, 1975. "A Comment on Short-Run and Long-Run Trade-Offs between Inflation and Unemployment in Australia," Australian Economic Papers, Wiley Blackwell, vol. 14(24), pages 132-136, June.
    13. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    14. David Gruen & Jacqueline Dwyer, 1996. "Are Terms of Trade Rises Inflationary?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 29(2), pages 211-224, April.
    15. A. W. Phillips, 1958. "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957," Economica, London School of Economics and Political Science, vol. 25(100), pages 283-299, November.
    16. Robert J. Gordon, 1997. "The Time-Varying NAIRU and Its Implications for Economic Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 11-32, Winter.
    17. Victor Argy & Anthony Brennan & Glenn Stevens, 1990. "Monetary Targeting: The International Experience," The Economic Record, The Economic Society of Australia, vol. 66(1), pages 37-62, March.
    18. Gordon de Brouwer & James O'Regan, 1997. "Evaluating Simple Monetary-policy Rules for Australia," RBA Annual Conference Volume (Discontinued), in: Philip Lowe (ed.),Monetary Policy and Inflation Targeting, Reserve Bank of Australia.
    19. W. E. Norton, 1976. "Inflation And Unemployment: Some Issues," Economic Papers, The Economic Society of Australia, vol. 1(51), pages 13-28, February.
    20. Jeffrey Carmichael & John Broadbent, 1980. "Inflation-unemployment Trade Offs in an Open Economy: Theory and Evidence for Australia," RBA Research Discussion Papers rdp8010, Reserve Bank of Australia.
    21. Gruen, David & Pagan, Adrian & Thompson, Christopher, 1999. "The Phillips curve in Australia," Journal of Monetary Economics, Elsevier, vol. 44(2), pages 223-258, October.
    22. P.D. Jonson & K.L. Mahar, 1972. "Earnings and Award Wages in Australia," RBA Research Discussion Papers rdp27, Reserve Bank of Australia.
    23. Rao, B Bhaskara, 1977. "An Analysis of the Short and Long-run Trade-offs between Unemployment and Inflation and Estimates of the Equilibrium Steady State Unemployment Rate in Australia," Australian Economic Papers, Wiley Blackwell, vol. 16(29), pages 273-284, December.
    24. King, Robert G. & Watson, Mark W., 1994. "The post-war U.S. phillips curve: a revisionist econometric history," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 41(1), pages 157-219, December.
    25. Leeper, Eric M. & Gordon, David B., 1992. "In search of the liquidity effect," Journal of Monetary Economics, Elsevier, vol. 29(3), pages 341-369, June.
    26. Pagan, Adrian, 1980. "Some identification and estimation results for regression models with stochastically varying coefficients," Journal of Econometrics, Elsevier, vol. 13(3), pages 341-363, August.
    27. Parkin, Michael, 1976. "Yet Another Look at Australia's Short-Run and Long-Run Trade-Offs between Inflation and Unemployment," Australian Economic Papers, Wiley Blackwell, vol. 15(26), pages 128-139, June.
    28. Guy Debelle & Douglas Laxton, 1997. "Is the Phillips Curve Really a Curve? Some Evidence for Canada, the United Kingdom, and the United States," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 249-282, June.
    29. Parkin, Michael, 1973. "The Short-Run and Long-Run Trade-Offs Between Inflation and Unemployment in Australia," Australian Economic Papers, Wiley Blackwell, vol. 12(21), pages 127-144, December.
    30. Jonson, P D & Mahar, K L & Thompson, G J, 1974. "Earnings and Award Wages in Australia," Australian Economic Papers, Wiley Blackwell, vol. 13(22), pages 80-98, June.
    31. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    32. repec:bla:ecorec:v:74:y:1998:i:227:p:384-98 is not listed on IDEAS
    33. Joseph Stiglitz, 1997. "Reflections on the Natural Rate Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 3-10, Winter.
    34. repec:bla:ecorec:v:66:y:1990:i:192:p:37-62 is not listed on IDEAS
    35. L. J. Perry, 1980. "A Note on Phillips and Phillips Curve Economics," The Economic Record, The Economic Society of Australia, vol. 56(152), pages 87-90, March.
    36. P.D. Jonson & K.L. Mahar & G.J. Thompson, 1973. "Earnings and Award Wages in Australia," RBA Research Discussion Papers rdp27rev, Reserve Bank of Australia.
    37. repec:bla:ecorec:v:57:y:1981:i:156:p:35-46 is not listed on IDEAS
    38. Nevile, John W, 1977. "Domestic and Overseas Influences on Inflation in Australia," Australian Economic Papers, Wiley Blackwell, vol. 16(28), pages 121-129, June.
    39. repec:bla:econom:v:53:y:1986:i:210(s):p:s53-74 is not listed on IDEAS
    40. Kerry E. Schott, 1969. "An Equation for Average Weekly Earnings," RBA Research Discussion Papers rdp07, Reserve Bank of Australia.
    41. repec:bla:ecorec:v:76:y:2000:i:235:p:321-42 is not listed on IDEAS
    42. McDonald, John, 1975. "Wages and Prices in Australia: On the Short and Long-run Trade-Offs between Inflation and Unemployment," Australian Economic Papers, Wiley Blackwell, vol. 14(25), pages 154-170, December.
    43. Edmund S. Phelps, 1968. "Money-Wage Dynamics and Labor-Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 76(4), pages 678-678.
    44. repec:bla:ecorec:v:70:y:1994:i:209:p:133-48 is not listed on IDEAS
    45. Stephen Grenville, 1997. "The Evolution of Monetary Policy: From Money Targets to Inflation Targets," RBA Annual Conference Volume (Discontinued), in: Philip Lowe (ed.),Monetary Policy and Inflation Targeting, Reserve Bank of Australia.
    46. Richard Jackman, 1998. "European Unemployment: Why is it so High and What Should be Done About it?," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guy Debelle & James Vickery, 1998. "Is the Phillips Curve A Curve? Some Evidence and Implications for Australia," The Economic Record, The Economic Society of Australia, vol. 74(227), pages 384-398, December.
    2. Jeff Borland & Ian McDonald, 2000. "Labour Market Models of Unemployment in Australia," Melbourne Institute Working Paper Series wp2000n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. G.C. Lim & Robert Dixon & Sarantis Tsiaplias, 2009. "Phillips Curve and the Equilibrium Unemployment Rate," The Economic Record, The Economic Society of Australia, vol. 85(271), pages 371-382, December.
    4. Juncal Cunnado & Fernando PErez De Gracia, 2003. "Sacrifice Ratios: Some lessons from EMU countries, 1960-2001," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(3), pages 327-337.
    5. Juncal Cunado Eizaguirre & Fernando Pérez de Gracía Hidalgo, "undated". "Tasa de sacrificio en la UEM: Un análisis empírico," Studies on the Spanish Economy 70, FEDEA.
    6. Richard A. Ashley & Randall J. Verbrugge., 2006. "Mis-Specification in Phillips Curve Regressions: Quantifying Frequency Dependence in This Relationship While Allowing for Feedback," Working Papers e06-11, Virginia Polytechnic Institute and State University, Department of Economics.
    7. Eliasson, Ann-Charlotte, 2001. "Is the Short-run Phillips Curve Nonlinear? Empirical Evidence for Australia, Sweden and the United States," Working Paper Series 124, Sveriges Riksbank (Central Bank of Sweden).
    8. Marco Gross & Willi Semmler, 2019. "Mind the Output Gap: The Disconnect of Growth and Inflation during Recessions and Convex Phillips Curves in the Euro Area," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 81(4), pages 817-848, August.
    9. Enders, Walter & Hurn, Stan, 2002. "Asymmetric price adjustment and the Phillips curve," Journal of Macroeconomics, Elsevier, vol. 24(3), pages 395-412, September.
    10. Robert Leeson, 2000. "Inflation, Disinflation and the Natural Rate of Unemployment: A Dynamic Framework for Policy Analysis," RBA Annual Conference Volume (Discontinued), in: David Gruen & Sona Shrestha (ed.),The Australian Economy in the 1990s, Reserve Bank of Australia.
    11. Mallick, Debdulal, 2019. "Policy regimes and the shape of the Phillips curve in Australia," Journal of Policy Modeling, Elsevier, vol. 41(6), pages 1077-1094.
    12. Laxton, Douglas & Rose, David & Tambakis, Demosthenes, 1999. "The U.S. Phillips curve: The case for asymmetry," Journal of Economic Dynamics and Control, Elsevier, vol. 23(9-10), pages 1459-1485, September.
    13. Kajuth, Florian, 2012. "Identifying the Phillips curve through shifts in volatility," Journal of Macroeconomics, Elsevier, vol. 34(4), pages 975-991.
    14. Tejada, César A. O. & Portugal, Marcelo S., 2002. "Credibility and Reputation: An Application of the External Circumstances Model for the Real Plan," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 56(4), October.
    15. Aleksejs Meļihovs & Anna Zasova, 2009. "Assessment of the natural rate of unemployment and capacity utilisation in Latvia," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(2), pages 25-46, December.
    16. Peter Isard & Douglas Laxton & Ann-Charlotte Eliasson, 1999. "Simple Monetary Policy Rules Under Model Uncertainty," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(4), pages 537-577, November.
    17. Bardsen, Gunnar & Eitrheim, Oyvind & Jansen, Eilev S. & Nymoen, Ragnar, 2005. "The Econometrics of Macroeconomic Modelling," OUP Catalogue, Oxford University Press, number 9780199246502.
    18. Mardi Dungey & John Pitchford, 2001. "An Empirical Analysis of the Effect of Growth on Inflation, Australia, Canada and the United States," CEPR Discussion Papers 438, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    19. Ștefan George & Paraschiv Anca & Volintiru Clara, 2022. "Alternative Unemployment Rates in Romania," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 16(1), pages 1491-1504, August.
    20. Vasiliki Bozani, 2011. "NAIRU, Unemployment and Post Keynesian Economics," Working Papers 1104, University of Crete, Department of Economics.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:moneco:v:44:y:1999:i:2:p:223-258. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505566 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.