Article citationsMore >>

STOCK, J.H. Unit roots, structural breaks and trends. In: Engle and McFadden Handbook of Econometrics, v.4. Elsevier, p. 2740-2841, 1994.

has been cited by the following article:

Article

Unemployment and Inflation: An Estimated Phillips Curve for Brazil (2002-2014)

1Department of Economics, Administration and Accounting Science, University of Passo Fundo, Passo Fundo/RS, Brazil


Journal of Finance and Economics. 2015, Vol. 3 No. 5, 77-85
DOI: 10.12691/jfe-3-5-1
Copyright © 2015 Science and Education Publishing

Cite this paper:
Gustavo Antonio Ponzoni, Julcemar Bruno Zilli. Unemployment and Inflation: An Estimated Phillips Curve for Brazil (2002-2014). Journal of Finance and Economics. 2015; 3(5):77-85. doi: 10.12691/jfe-3-5-1.

Correspondence to: Julcemar  Bruno Zilli, Department of Economics, Administration and Accounting Science, University of Passo Fundo, Passo Fundo/RS, Brazil. Email: jbzilli@upf.br

Abstract

The relationship between inflation and unemployment has been discussed in different economic levels seeking an understanding of the interrelationships existing in the Brazilian economy and how the information is passed on and used by the decision makers. Thus, this study’s main objective is to analyze the ability of the Phillips curve to describe the dynamics of Brazilian inflation, using aggregate data from 2002 to 2014. After the estimated model it was possible to conclude that this can’t either be considered well adjusted, nor a full explanation to the Brazilian inflationary dynamics. It was also verified that the inflation expectation had greater impact on the formation of the current inflation than the past inflation. This increased weight of future inflation in the formation of the current inflation can be explained in terms, by the theory of rational expectations. The effects of an exchange rate shock remains having direct influence on the formation of internal prices and, as a consequence, on the inflation.

Keywords