Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/186731 
Year of Publication: 
1990
Series/Report no.: 
Working Paper No. 40
Publisher: 
Levy Economics Institute of Bard College, Annandale-on-Hudson, NY
Abstract: 
Economists have assumed that the Phillips curve, which shows a positive (negative) relation between inflation and the output ratio (unemployment rate), may be mapped off the aggregate demand -aggregate supply apparatus. The paper shows that the Phillips curve requires that unlikely restrictions be put on the form of the aggregate supply and aggregate demand curves. In this case, it is inappropriate to treat data on inflation and capacity utilization as the basis for estimating an underlying formal model. The paper therefore uses a nonparametric, data-driven method to describe the data. This method, of kernel regression, shows the inflation-unemployment association in Phillips's sample to be negative on a global scale, yet irregular within particular ranges of unemployment.
Document Type: 
Working Paper

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