Unemployment and Inflation in Ireland: 1926-2012

25 Pages Posted: 5 May 2015

See all articles by Stefan Gerlach

Stefan Gerlach

Central Bank of Ireland; Centre for Economic Policy Research (CEPR)

Reamonn Lydon

Independent

Rebecca Stuart

Central Bank of Ireland

Multiple version iconThere are 2 versions of this paper

Date Written: May 2015

Abstract

We study the determination of Irish inflation between 1926 and 2012. The difference between unemployment and the NAIRU is a significant determinant of inflation in a simple backward-looking Phillips Curve that incorporates import prices. While there is a break in 1979-80, when the link to Sterling was abandoned, this effect is present in the full sample and in the subsamples spanning 1926-1979 and 1980-2012. The econometric model assumes that the NAIRU follows a random walk.

Keywords: historical statistics, import prices, inflation, Ireland, unemployment

JEL Classification: E3, E4, N14

Suggested Citation

Gerlach, Stefan and Lydon, Reamonn P and Stuart, Rebecca, Unemployment and Inflation in Ireland: 1926-2012 (May 2015). CEPR Discussion Paper No. DP10567, Available at SSRN: https://ssrn.com/abstract=2602804

Stefan Gerlach (Contact Author)

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Reamonn P Lydon

Independent ( email )

Rebecca Stuart

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

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