Non-linearity in the Phillips curve: evidence from Nigeria

Olufemi Gbenga Onatunji, Oluwayemisi Kadijat Adeleke, Akintoye Victor Adejumo
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Abstract

Purpose This study reinvestigates the validity of the Phillips curve in Nigeria for the period 1980–2020 by considering the asymmetric nexus between unemployment and inflation. Design/methodology/approach The nonlinear autoregressive distributed lag (NARDL) technique was used to decompose the unemployment variable into two components: tight and loosened labour markets. Findings The empirical outcome shows that unemployment has a significant negative effect on inflation when the labour market is tight and a weakly negative and significant effect on inflation when the labour market is loose. The study confirms an asymmetric Phillips curve in Nigeria since the positive (tight) unemployment rate exerts a greater effect on inflation than the negative (loosened) unemployment rate. Practical implications The findings of this study have important implications for implementing monetary policy in Nigeria. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the existence of a nonlinear Phillip curve in Nigeria.
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菲利普斯曲线的非线性:来自尼日利亚的证据
本研究通过考虑失业率和通货膨胀之间的不对称关系,重新考察了1980-2020年尼日利亚菲利普斯曲线的有效性。设计/方法/方法使用非线性自回归分布滞后(NARDL)技术将失业变量分解为两个组成部分:紧缩和宽松的劳动力市场。实证结果表明,当劳动力市场紧张时,失业对通胀有显著的负向影响;当劳动力市场宽松时,失业对通胀有微弱的显著负向影响。该研究证实了尼日利亚的不对称菲利普斯曲线,因为正(紧)失业率比负(松)失业率对通胀的影响更大。本研究的结果对尼日利亚实施货币政策具有重要意义。原创性/价值据作者所知,这是第一个调查尼日利亚非线性菲利普曲线存在的研究。
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来源期刊
CiteScore
3.20
自引率
7.70%
发文量
41
期刊介绍: African Journal of Economic and Management Studies (AJEMS) advances both theoretical and empirical research, informs policies and practices, and improves understanding of how economic and business decisions shape the lives of Africans. AJEMS is a multidisciplinary journal and welcomes papers from all the major disciplines in economics, business and management studies.
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