Abstract:
Phillips Curve is one of the most controversial topics of economic literature. Phillips Curve hypothesis is investigated for countries Turkey, Chile, Hungary, Korea, Mexico and Poland for years between 1990 and 2020. Time period for each country varies due to the availability of necessary data. Two different Phillips Curve models were constructed and estimated with the Ordinary Least Square (OLS) method for each country. Results show that unemployment rate is statistically significant for Turkey, Chile and Korea while explaining inflation dynamics. Moreover, it is found that for all of these economies' inflation expectations are the main driver of the inflation. Reduced Form Phillips Curve estimation results suggest that exchange rate, but not the oil price, significantly contribute to the inflation dynamics of emerging countries.
