Is the Inflation-Output Nexus Asymmetric in the Euro Area?
32 Pages Posted: 31 Oct 2010
Date Written: April 1, 2006
Abstract
This paper challenges the assumption that the inflation process within the euro area is well-described by a linear Phillips curve and investigates in a nonparametric framework how inflation is sensitive to output growth. An asymmetric output-inflation trade-off is pointed out in the euro area at both aggregated and individual country levels.
Keywords: Nonlinear Phillips curve; price stability; kernel smoothing
JEL Classification: C14, C32, E31, E52
Suggested Citation: Suggested Citation
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