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Title:Employment growth, inflation and output growth: Was Phillips right? Evidence from a dynamic panel PDF Logo
Authors:Caporale, Guglielmo Maria
Škare, Marinko
Issue Date:2011
Series/Report no.:Discussion papers // German Institute for Economic Research 1138
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.
Subjects:employment growth
inflation
output growth
Golden Triangle theory
JEL:C23
E24
E31
E60
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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