IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v13y2025i1p14-d1562933.html
   My bibliography  Save this article

State-Dependent Phillips Curve

Author

Listed:
  • Hyun Hak Kim

    (Department of Economics, Kookmin University, Seoul 02707, Republic of Korea)

  • Na Kyeong Lee

    (Department of Economics, Seoul Women’s University, Seoul 01797, Republic of Korea)

Abstract

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.

Suggested Citation

  • Hyun Hak Kim & Na Kyeong Lee, 2025. "State-Dependent Phillips Curve," Economies, MDPI, vol. 13(1), pages 1-14, January.
    • Handle: RePEc:gam:jecomi:v:13:y:2025:i:1:p:14-:d:1562933
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/13/1/14/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/13/1/14/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:13:y:2025:i:1:p:14-:d:1562933. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.