Employment Growth, Inflation and Output Growth: Was Phillips Right? Evidence from a Dynamic Panel

Caporale, Guglielmo Maria and Škare, Marinko (2011) Employment Growth, Inflation and Output Growth: Was Phillips Right? Evidence from a Dynamic Panel. Centre for EMEA Banking, Finance and Economics Working Paper Series, 2011 (24). pp. 1-25.

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Abstract

In this paper we analyse the short- and long-run relationship between employment growth, inflation and output growth in Phillips’ tradition. For this purpose we apply FMOLS, DOLS, PMGE, MGE, DFE, and VECM methods to a nonstationary heterogeneous dynamic panel including annual data for 119 countries over the period 1970-2010, and also carry out multivariate Granger causality tests. The empirical results strongly support the existence of a single cointegrating relationship between employment growth, inflation and output growth with bidirectional causality between employment growth and inflation as well as output growth, giving support to Phillips’ Golden Triangle theory.

Item Type: Article
Uncontrolled Keywords: Centre for EMEA Banking, Finance and Economics Working Paper Series, Employment Growth, Inflation, Output Growth, Golden Triangle theory
Subjects: 300 Social sciences > 330 Economics
Department: Guildhall School of Business and Law
Depositing User: David Pester
Date Deposited: 21 Apr 2015 11:10
Last Modified: 21 Apr 2015 11:10
URI: http://repository.londonmet.ac.uk/id/eprint/447

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