Pursuing the Phillips Curve in an African Monarchy: A Swazi Case Study

IF 2.4 Q2 ECONOMICS Contemporary Economics Pub Date : 2018-09-01 DOI:10.5709/ce.1897-9254.494
A. Phiri
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Abstract

The purpose of this study is to examine whether we can identify a Phillips curve fit for the Kingdom of Eswatini as a low middle income Sub-Saharan Africa monarchy using data collected between 1991 and 2016. In our approach we rely on the recently introduced nonlinear autoregressive distributive lag (N-ARDL) model to a variety of Phillips curve specifications. For robustness sake, we further employ three filters (one-sided HP, two-sided HP, and Corbae-Oularis filters) to extract the gap variables necessary for empirical analysis. Our findings point to a linear, short-run traditional Phillips curve whereas we find strong support for concave shaped unemployment-gap and output–gap based Phillips curve specifications. Given the specific form of concavity discovered in the Phillips curves, the low inflation rate experienced over the last couple of decades can be attributed to a worsening labour and goods markets. Moreover, our evidence further cautions Swazi policymakers of ‘overheating’ of the economy during economic booms in which stabilization tools are required to implemented in such instances.
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在非洲君主政体中追求菲利普斯曲线:以斯威士兰为例
本研究的目的是利用1991年至2016年收集的数据,检验我们是否可以确定适合Eswatini王国作为撒哈拉以南非洲中低收入君主国的菲利普斯曲线。在我们的方法中,我们依靠最近引入的非线性自回归分布滞后(N-ARDL)模型来满足各种菲利普斯曲线规范。为了稳健性起见,我们进一步使用三种过滤器(单边HP,双面HP和Corbae-Oularis过滤器)来提取经验分析所需的间隙变量。我们的研究结果指向一个线性的、短期的传统菲利普斯曲线,而我们发现基于失业缺口和产出缺口的凹形菲利普斯曲线规范得到了强有力的支持。考虑到菲利普斯曲线的特殊凹形,过去几十年的低通胀率可以归因于劳动力和商品市场的恶化。此外,我们的证据进一步警告斯威士兰政策制定者在经济繁荣期间经济“过热”,在这种情况下需要实施稳定工具。
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来源期刊
CiteScore
3.70
自引率
9.50%
发文量
0
审稿时长
24 weeks
期刊介绍: The mission of the Contemporary Economics is to publish advanced theoretical and empirical research in economics, finance, accounting and management with the noticeable contribution and impact to the development of those disciplines and preferably with practice relevancies. All entirety of methods is desirable, including a falsification of conventional understanding, theory building through inductive or qualitative research, first empirical testing of a theory, meta-analysis with theoretical implications, constructive replication that clarifies the boundaries or range of a theory for theoretical research as well as qualitative, quantitative, field, laboratory, meta-analytic, and combination for an empirical research. This clear priority for comprehensive manuscripts containing a methodology-based theoretical and empirical research with implications and recommendations for policymaking does not exclude manuscripts entirely focused on theory or methodology. Manuscripts that raise significant, actual topics of international relevance will be highly appreciated. The interdisciplinary approach including – besides economic, financial, accounting or managerial –also other aspects, is welcomed.
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