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On Policy Implications of a Non-linear Phillips Curve in a Stochastic Environment

Published online by Cambridge University Press:  17 August 2016

David Chappell
David Chappell*
Affiliation:
University of Sheffield
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Extract

In a recent paper Hvidding [5] derived some interesting policy implications of a non-linear Phillips curve when the unemployment rate is a random variable. Hvidding’s analysis focussed on the following model:

where p is the current inflation rate, u is the unemployment rate, p* is the expected inflation rate and a, b and c are constants. The influence of uncertainty in this model manifests itself in the expected value of u-1. For this Hvidding used an approximation suggested by Mood, Graybill and Boes ([6] page 181).

Type
Brief Report
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 48 , Issue 2 , 1982 , pp. 191 - 194
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1982 

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References

[1] Apostol, T.M. (1964), Calculus — Vol. II, Blaisdell Publishing Company, New York,Google Scholar
[2] Chappell, D. and Peel, D.A. (1979), On the Dynamic Stability of Monetary Models when the Money Supply is Endogenous, The Manchester School.Google Scholar
[3] Hastings, N.A. and Peacock, J.B., (1975), Statistical Distributions, Butterworth.Google Scholar
[4] Hoel, P.G. (1971), Introduction to Mathematical Statistics, John Wiley and Sons Inc.Google Scholar
[5] Hvidding, J.M. (1981), «Policy Implications of a Non-Linear Phillips Curve in a Stochastic Environment», Journal of Macroeconomics.Google Scholar
[6] Mood, A.M., Graybill, F.A. and Boes, D.C. (1975), Introduction to the Theory of Statistics, McGraw-Hill Book Company, New York.Google Scholar