Is the Phillips Curve Different in Poor Countries?

12 Pages Posted: 11 Jan 2018

See all articles by Michael Bleaney

Michael Bleaney

University of Nottingham - School of Economics

Manuela Francisco

University of Nottingham - School of Economics

Date Written: January 2018

Abstract

It has been suggested that the Phillips curve (positive output‐inflation correlation) is inverted in poor countries. It is argued here that the truth is more complex. In poor countries temporary supply‐side shocks, for example to agricultural output, induce a negative correlation between prices and output rather than between inflation rates and output. Empirical evidence supports this hypothesis.

Keywords: business cycle, climate shocks, inflation, output

JEL Classification: E24, E31, E32

Suggested Citation

Bleaney, Michael and Francisco, Manuela, Is the Phillips Curve Different in Poor Countries? (January 2018). Bulletin of Economic Research, Vol. 70, Issue 1, pp. E17-E28, 2018. Available at SSRN: https://ssrn.com/abstract=3099827 or http://dx.doi.org/10.1111/boer.12124

Michael Bleaney (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 0 115 951 5265 (Phone)
+44 0 115 951 5141 (Fax)

Manuela Francisco

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
115 951 5870 (Phone)
115 951 4159 (Fax)

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