Simple four-step procedure of parabolic B curve determination for OECD countries in 1990Q1 – 2015Q4

• Authors: Dariusz J. Błaszczuk
• Languages of publication: EN

Abstracts

EN

In theory the short-term relationship between inflation and GDP rate is known as the positive slope straight line SAS. In practice it is reflected by a concave non-monotonic function. The results of estimation depend on unusual observations. We propose a simple four-step procedure: first, basic estimation based on all observations; then estimation having ignored outliers; next, estimation on the average GDP rates for given inflation rates for the same observations; lastly, estimation skipping outlying averages. Empirical analysis for 26 OECD countries on quarterly data brought satisfactory results. They justified the determination of optimal GDP rate and corresponding inflation for every country. Finally, recommendations for policymakers have been formulated.

Keywords

EN

simple three-step procedure; parabolic B curve; optimal inflation; neutral inflation; inflation rate; GDP rate; relationship between inflation and GDP rate; OECD countries

• Publisher: Uniwersytet Ekonomiczny w Poznaniu
• Journal: Economics and Business Review
• Year: 2016
• Volume: 2(16)
• Issue: 3
• Pages: 121-137

Dates

published

2016-09-30

Contributors

author

Dariusz J. Błaszczuk

• Vistula University, Faculty of Business and International Relations, ul. Stokłosy 3, 02-787 Warsaw; Poland

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Identifiers

DOI

10.18559/ebr.2016.3.8