engleski

MODIFICATIONS OF THE PHILLIPS CURVE ON EXAMPLE OF CROATIA

This paper evaluates the Phillips curve in the environment of Croatian economy applying the basic principles of "new classical economics". Based on such theoretical paradigm, this paper evaluates the parameters of several reformulations of the Phillips curve which take into consideration specific features of dynamic and the relationship between the inflation of real wages, expected prices and the unemployment rate in the Republic of Croatia. Precisely, besides the general form of the Phillips curve and implementing the iterative Quasi-Newton method, the evaluation of the parameters of the four cases of modified Phillips curve has been made and afterwards the effects of adaptive and rational expectations on the interdependence of the basic variables have been added. Finally, the achieved results have been interpreted and connected with the situation in Croatian macroeconomic environment.

Phillips curve; new classical economics; expectations augmented Phillips curve (EAPC)

nije evidentirano