State-Dependent Phillips Curve
We propose a state-dependent Phillips curve (PC) where the regime has changed endogenously. Using this framework, a free-standing PC is constructed. This study tests the robustness of the model, various types of inflation, slack measures, and various expectation measures. The PC is found to work str...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2025-01-01
|
| Series: | Economies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7099/13/1/14 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832588618953129984 |
|---|---|
| author | Hyun Hak Kim Na Kyeong Lee |
| author_facet | Hyun Hak Kim Na Kyeong Lee |
| author_sort | Hyun Hak Kim |
| collection | DOAJ |
| description | We propose a state-dependent Phillips curve (PC) where the regime has changed endogenously. Using this framework, a free-standing PC is constructed. This study tests the robustness of the model, various types of inflation, slack measures, and various expectation measures. The PC is found to work strongly during recessionary periods but becomes weaker once an economy recovers. The latent factors that determine the regimes are highly correlated with the uncertainty measure. During recessionary periods, the uncertainty becomes negatively more certain and strengthens the relationship between inflation and labor market slack. |
| format | Article |
| id | doaj-art-4b3d6b5e9fa1436daed617339c63d193 |
| institution | Kabale University |
| issn | 2227-7099 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj-art-4b3d6b5e9fa1436daed617339c63d1932025-01-24T13:30:01ZengMDPI AGEconomies2227-70992025-01-011311410.3390/economies13010014State-Dependent Phillips CurveHyun Hak Kim0Na Kyeong Lee1Department of Economics, Kookmin University, Seoul 02707, Republic of KoreaDepartment of Economics, Seoul Women’s University, Seoul 01797, Republic of KoreaWe propose a state-dependent Phillips curve (PC) where the regime has changed endogenously. Using this framework, a free-standing PC is constructed. This study tests the robustness of the model, various types of inflation, slack measures, and various expectation measures. The PC is found to work strongly during recessionary periods but becomes weaker once an economy recovers. The latent factors that determine the regimes are highly correlated with the uncertainty measure. During recessionary periods, the uncertainty becomes negatively more certain and strengthens the relationship between inflation and labor market slack.https://www.mdpi.com/2227-7099/13/1/14stochastic volatilityPhillips curveinflation regimeVIX |
| spellingShingle | Hyun Hak Kim Na Kyeong Lee State-Dependent Phillips Curve Economies stochastic volatility Phillips curve inflation regime VIX |
| title | State-Dependent Phillips Curve |
| title_full | State-Dependent Phillips Curve |
| title_fullStr | State-Dependent Phillips Curve |
| title_full_unstemmed | State-Dependent Phillips Curve |
| title_short | State-Dependent Phillips Curve |
| title_sort | state dependent phillips curve |
| topic | stochastic volatility Phillips curve inflation regime VIX |
| url | https://www.mdpi.com/2227-7099/13/1/14 |
| work_keys_str_mv | AT hyunhakkim statedependentphillipscurve AT nakyeonglee statedependentphillipscurve |