The Phillips curve : (in)stability, the role of credit, and implications for potential output measurement


Schleer, Frauke ; Kappler, Marcus


[img]
Vorschau
PDF
dp14067.pdf - Veröffentlichte Version

Download (593kB)

URL: https://ub-madoc.bib.uni-mannheim.de/37115
URN: urn:nbn:de:bsz:180-madoc-371155
Dokumenttyp: Arbeitspapier
Erscheinungsjahr: 2014
Titel einer Zeitschrift oder einer Reihe: ZEW Discussion Papers
Band/Volume: 14-067
Ort der Veröffentlichung: Mannheim
Sprache der Veröffentlichung: Englisch
Einrichtung: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC-Schriftenreihe: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Fachgebiet: 330 Wirtschaft
Fachklassifikation: JEL: E32 , E44 , E60,
Freie Schlagwörter (Englisch): Phillips curve , potential output , output gap , financial cycle , credit cycle , NAIRU
Abstract: The path of output prior to the financial and economic crisis turned out to be not sustainable and lower than previously estimated in some European crisis countries. Specifically, the output gaps have been underestimated (and inversely potential output overestimated) before the recent crisis. It is fair to say that the employed estimation techniques failed to provide valid real-time assessments of the state of the credit boom driven euro area economies. One reason for this may be the breakdown of the Phillips curve relationship during the last years. Against this backdrop, we comprehensively analyse the validity of the Phillips curve for five European countries with a focus on the recent crisis. We find that a mostly insignificant relation between in ation and the output gap or unemployment gap, which questions the adequacy of the Phillips curve to identify the sustainable level of output in an economy. The credit-driven boom in crisis countries has made clear that (disadvantageous) financial markets conditions may result in structural and long-term real economic distortions that are not yet taken into account in conventional methods for the estimation of potential output and the output gap. Since both, potential output and output gaps, are a key notion in policymaking, incorporating financial factors could improve the reliability of the estimates. Our results point in this direction.




Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




Metadaten-Export


Zitation


+ Suche Autoren in

+ Download-Statistik

Downloads im letzten Jahr

Detaillierte Angaben



Sie haben einen Fehler gefunden? Teilen Sie uns Ihren Korrekturwunsch bitte hier mit: E-Mail


Actions (login required)

Eintrag anzeigen Eintrag anzeigen