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Is The Phillips Curve Different In Poor Countries?

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  • Michael Bleaney
  • Manuela Francisco

Abstract

It has been suggested that the Phillips curve (positive output†inflation correlation) is inverted in poor countries. It is argued here that the truth is more complex. In poor countries temporary supply†side shocks, for example to agricultural output, induce a negative correlation between prices and output rather than between inflation rates and output. Empirical evidence supports this hypothesis.

Suggested Citation

  • Michael Bleaney & Manuela Francisco, 2018. "Is The Phillips Curve Different In Poor Countries?," Bulletin of Economic Research, Wiley Blackwell, vol. 70(1), pages 17-28, January.
    • Handle: RePEc:bla:buecrs:v:70:y:2018:i:1:p:e17-e28
    DOI: 10.1111/boer.12124
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