Inflation and Output Gaps Reconsidered Assymetries and Nonlinear Phillips Curve Evidence for the Turkish Economy


Bilman A. S., Utkulu U.

Journal of Yasar University, vol.5, no.19, 2010 (Peer-Reviewed Journal)

  • Publication Type: Article / Article
  • Volume: 5 Issue: 19
  • Publication Date: 2010
  • Journal Name: Journal of Yasar University
  • Journal Indexes: TR DİZİN (ULAKBİM)
  • Dokuz Eylül University Affiliated: Yes

Abstract

In this paper, the relationship between the inflation gap and output gap is investigated by adopting the Markov switching model and using monthly data between 1990:1 and 2008:5. To the findings, the relationship between inflation gap and output gap is nonlinear. The major contribution of this study is that regime probabilities are computed in the context of Markov switching model by following Chen (2006).