Inflation history and the sacrifice ratio: Episode-specific evidence

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Abstract
  • This article examines whether episode-specific analysis can show a negative relationship between inflation and the slope of the Phillips curve that has been found in cross-country analysis. While the relationship between inflation and the Phillips curve slope is widely accepted from cross-country analysis, it has remained unproven in previous episode-specific studies. By defining inflation history as a weighted average of past inflation, this study finds a negative effect of inflation history on the sacrifice ratio, which is what is expected from the cross-country analysis. The negative relationship does not disappear even after including other conventional determinants of the sacrifice ratio.
TitleInflation history and the sacrifice ratio: Episode-specific evidence
CreatorSmith, Julie K.
Senda, T.
PublisherContemporary Economic Policy
Academic DepartmentEconomics
DivisionSocial Sciences
OrganizationLafayette College
Date IssuedJuly 2008
Date Available2015-04-14T13:46:58Z
TypeArticle
LanguageEnglish
Bibliographic CitationSenda, T. and J. K. Smith (2008 July) "Inflation history and the sacrifice ratio: Episode-specific evidence." Contemporary Economic Policy 26 (3): 409-19.
Standard IdentifierHandle 10385/1785
DOI 10.1111/j.1465-7287.2007.00087.x
Permalinkhttp://hdl.handle.net/10385/1785
Rights Statement In Copyright In Copyright
Rights HoldersWestern Economic Association International
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