BEYOND THE TRADITIONAL PHILLIPS CURVE: GROWTH, PROFIT RATES, AND INFLATION DYNAMICS IN GREECE ACROSS MONETARY REGIMES
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ABSTRACT
This study has a twofold objective: 1) to examine the effects of the “growth-utilization rate” (the rate of growth over the rate of profit) on inflation, and 2) to investigate the empirical performance of the Phillips curve on the same subject. The estimations refer to Greece for the period 1961-2022. The relationship between the “growth-utilization rate” and inflation is examined by applying the statistical method of “transfer entropy” and an ARDL model. We also employ linear regression and multiple econometric specifications to examine the stability and structural changes in the relationship between inflation and unemployment. The empirical analysis reveals significant effects of past inflation and the growth-utilization rate on current inflation, both in terms of short-term effects and long-term coefficients. In contrast, there is considerable variation in the Phillips curve across different economic periods, with substantial evidence of regime-dependent parameters. In short, the Phillips curve relationship is neither stable nor linear across different economic policies and monetary regimes. Overall, the empirical analysis has important implications for the efficiency of monetary policy inside a currency union and for a better understanding of labor market dynamics during a severe economic recession.
MÁS ALLÁ DE LA CURVA DE PHILLIPS TRADICIONAL: CRECIMIENTO, TASAS DE GANANCIAS Y DINÁMICA DE LA INFLACIÓN EN GRECIA EN LOS DIFERENTES REGÍMENES MONETARIOS
RESUMEN
El artículo tiene dos objetivos: examinar 1) los efectos de la “tasa crecimiento/utilización” de la capacidad productiva (la ratio tasa de crecimiento/tasa de ganancia) sobre la inflación y 2) el desempeño empírico de la curva de Phillips. Las estimaciones se refieren a Grecia para el periodo 1961-2022. Estudiamos la relación entre la “tasa de crecimiento/utilización” al aplicar el método de transfer entropy y un modelo ARDL. Asimismo, empleamos múltiples especificaciones econométricas para examinar la estabilidad y los cambios estructurales en la relación entre la inflación y el desempleo. El análisis empírico revela efectos significativos de corto y largo plazo de la inflación pasada y de la tasa de crecimiento/utilización sobre la inflación actual. En contraste, hay una variación considerable en la curva de Phillips en diferentes periodos económicos, con sustancial evidencia de dependencia de los parámetros respecto del régimen. En suma, la relación de la curva de Phillips no es estable ni lineal para diferentes políticas económicas y regímenes monetarios. En general, el análisis empírico tiene implicaciones importantes para la eficiencia de la política monetaria dentro de una unión monetaria y para comprender mejor la dinámica del mercado de trabajo durante una recesión económica severa.
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