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IS THE PHILLIPS CURVE A UNICORN?

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Date Issued:
2021
Abstract/Description:
The new Keynesian wage Phillips curve (NKWPC) is derived from the standard new Keynesian Phillips curve (NKPC) that is examined and verified by many economists. The NKWPC model uses the structural wage equation to present the significant inverse relationship between wage inflation and the unemployment rate in the US economy with the significant assumption of a constant natural rate of unemployment. This study examines the NKWPC model using the generalized method of moments (GMM) and generalized autoregressive conditionally heteroskedastic-M (GARCH-M) to confirm the critical inverse relationship of the Phillips curve. In particular, this study tests the NKWPC separately targeting the official unemployment rate from Komlos (2019)’s real unemployment rate. The estimated results of this study support the NKWPC re-confirming a significant negative relationship between wage inflation and unemployment, using two different econometric techniques of GMM and GARCH-M. Moreover, it is apparent that they do not distinguish the official unemployment rate from the real unemployment rate. The Phillips curve is not just a unicorn, or rarity, in the economic world. It is a substantial indicator and still holds merit. This study yields to another lending support to the importance of the Phillips curve.
Title: IS THE PHILLIPS CURVE A UNICORN?.
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Name(s): Lee, Sanghyun Paul, author
Yuhn, Ky-Hyang, Thesis advisor
Florida Atlantic University, Degree grantor
Department of Economics
College of Business
Type of Resource: text
Genre: Electronic Thesis Or Dissertation
Date Created: 2021
Date Issued: 2021
Publisher: Florida Atlantic University
Place of Publication: Boca Raton, Fla.
Physical Form: application/pdf
Extent: 59 p.
Language(s): English
Abstract/Description: The new Keynesian wage Phillips curve (NKWPC) is derived from the standard new Keynesian Phillips curve (NKPC) that is examined and verified by many economists. The NKWPC model uses the structural wage equation to present the significant inverse relationship between wage inflation and the unemployment rate in the US economy with the significant assumption of a constant natural rate of unemployment. This study examines the NKWPC model using the generalized method of moments (GMM) and generalized autoregressive conditionally heteroskedastic-M (GARCH-M) to confirm the critical inverse relationship of the Phillips curve. In particular, this study tests the NKWPC separately targeting the official unemployment rate from Komlos (2019)’s real unemployment rate. The estimated results of this study support the NKWPC re-confirming a significant negative relationship between wage inflation and unemployment, using two different econometric techniques of GMM and GARCH-M. Moreover, it is apparent that they do not distinguish the official unemployment rate from the real unemployment rate. The Phillips curve is not just a unicorn, or rarity, in the economic world. It is a substantial indicator and still holds merit. This study yields to another lending support to the importance of the Phillips curve.
Identifier: FA00013772 (IID)
Degree granted: Thesis (M.S.)--Florida Atlantic University, 2021.
Collection: FAU Electronic Theses and Dissertations Collection
Note(s): Includes bibliography.
Subject(s): Phillips curve
Labor market
Persistent Link to This Record: http://purl.flvc.org/fau/fd/FA00013772
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Host Institution: FAU
Is Part of Series: Florida Atlantic University Digital Library Collections.