Original scientific paper
The Challenge of Application of Phillips Curve: The Case of Croatia
Ivo Družić
; University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia
Josip Tica
; University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia
Ante Mamić
; BICRO – Business Innovation Centre of Croatia, Zagreb, Croatia
Abstract
In this paper hypothesis of relation between unemployment and the rate of change in prices is tested in Croatia with data spanning from 1962 to 2004. Empirical test is designed with a goal of testing the original Phillips curve developed by A. W. Phillips and adaptive expectation augmented Phillips curve designed by Edmund S. Phelps. Since both these versions of the relationship were designed for the US economy, authors suggest a new theory of accommodation through insolvency for the Croatian economy.
Keywords
the Phillips curve; insolvency; transition; Croatia
Hrčak ID:
78588
URI
Publication date:
1.12.2006.
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