The Philip's Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis

Esu, Godwin and Atan, Johnson (2017): The Philip's Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis.

Abstract

In this study, we attempted the assessment of the validity of the Philip’s curve hypothesis in the Sub-Saharan African region. We employed a panel data technique of analysis, drawing data from twenty-nine countries in the region. The data spanned 24 years (1991 to 2015). The annual data for unemployment rate and inflation rate for these countries were obtained from World Development Indicators (WDI) (2016). The inflation rate was captured using the consumer price index (CPI), while unemployment rate was measured by total unemployment (as a percentage of total labour force, a national estimate) for these countries. Using a panel data analysis technique, our result showed that there was no significant relationship between inflation rate and the rate of unemployment. The result invalidated the existence of the common Philip’s Curve (that is, unemployment-inflation trade-off) in the Sub-Saharan African region.

• Item Type: MPRA Paper
• Language: English
• Keywords: Philip’s Curve, inflation, unemployment, economic policy, trade-off
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation

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