Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297616 
Authors: 
Year of Publication: 
2022
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 16 [Issue:] 4 [Year:] 2022 [Pages:] 460-478
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
The purpose of this study is to examine whether we can identify a Phillips curve fit for the Kingdom of Eswatini as a low middle income Sub-Saharan Africa monarchy using data collected between 1991 and 2016. In our approach we rely on the recently introduced nonlinear autoregressive distributive lag (N-ARDL) model to a variety of Phillips curve specifications. For robustness sake, we further employ three filters (one-sided HP, two-sided HP, and Corbae-Oularis filters) to extract the gap variables necessary for empirical analysis. Our findings point to a linear, short-run traditional Phillips curve whereas we find strong support for concave shaped unemployment-gap and output-gap based Phillips curve specifications. Given the specific form of concavity discovered in the Phillips curves, the low inflation rate experienced over the last couple of decades can be attributed to a worsening labour and goods markets. Moreover, our evidence further cautions Swazi policymakers of 'overheating' of the economy during economic booms in which stabilization tools are required to implemented in such instances.
Subjects: 
inflation
unemployment
nonlinear Phillips curve
nonlinear autoregressive distributive lag (N-ARDL) model
Eswatini
JEL: 
C32
C52
E24
E31
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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