Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197027 
Year of Publication: 
2017
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 5 [Issue:] 3 [Publisher:] MDPI [Place:] Basel [Year:] 2017 [Pages:] 1-12
Publisher: 
MDPI, Basel
Abstract: 
This article seeks to check the nonlinearity of the Phillips curve in Tunisia for the 1993-2012 period, relying on a hybrid new Keynesian Phillips curve modeled via a Logistic Smooth Transition Regression (LSTR) model with endogenous variables. We estimate this model using the nonlinear instrumental variables. The empirical results corroborate the new Keynesian assumption ofprice rigidity and show that the response of inflation to the output gap tends to be significant only if the inflation rate tends to be relatively high and exceeds a certain threshold. For a low inflation rate, the price rigidity dominates. This result is particularly evident in Tunisia, especially for the years following the 2011 revolution during which the elasticity of inflation rate to an excess demand has become highly important and the inflation rate experienced record levels.
Subjects: 
new Keynesian Phillips curve
nonlinearity
menu cost model
price rigidity
Tunisia
JEL: 
C22
C52
E31
E58
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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