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The Philip’s Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis

Received: 25 November 2017     Accepted: 5 December 2017     Published: 25 December 2017
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Abstract

In this study, we attempted the assessment of the validity of the Philip’s curve hypothesis in the Sub-Saharan African region. We employed a panel data technique of analysis, drawing data from twenty-nine countries in the region. The data spanned 24 years (1991 to 2015). The inflation rate was captured using the consumer price index (CPI – its log first difference), while unemployment rate was measured by total unemployment (as a percentage of total labour force, a national estimate). Using a panel data analysis technique, our result showed that there was no significant relationship between inflation rate and the rate of unemployment (based on Two-Way FE), but One-Way FE and RE showed a rather significant trade-off. Though the conflicting results suggest an inconclusive outcome, the Two-Way FE (that was the technique in focus in this study), seems to invalidate the existence of the common Philip’s Curve (that is, unemployment-inflation trade-off) in the Sub-Saharan African region.

Published in Journal of World Economic Research (Volume 6, Issue 5)
DOI 10.11648/j.jwer.20170605.11
Page(s) 59-66
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Philip’s Curve, Inflation, Unemployment, Economic Policy, Trade-off

References
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  • APA Style

    Godwin Essang Esu, Johnson Akpan Atan. (2017). The Philip’s Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis. Journal of World Economic Research, 6(5), 59-66. https://doi.org/10.11648/j.jwer.20170605.11

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    ACS Style

    Godwin Essang Esu; Johnson Akpan Atan. The Philip’s Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis. J. World Econ. Res. 2017, 6(5), 59-66. doi: 10.11648/j.jwer.20170605.11

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    AMA Style

    Godwin Essang Esu, Johnson Akpan Atan. The Philip’s Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis. J World Econ Res. 2017;6(5):59-66. doi: 10.11648/j.jwer.20170605.11

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  • @article{10.11648/j.jwer.20170605.11,
      author = {Godwin Essang Esu and Johnson Akpan Atan},
      title = {The Philip’s Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis},
      journal = {Journal of World Economic Research},
      volume = {6},
      number = {5},
      pages = {59-66},
      doi = {10.11648/j.jwer.20170605.11},
      url = {https://doi.org/10.11648/j.jwer.20170605.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20170605.11},
      abstract = {In this study, we attempted the assessment of the validity of the Philip’s curve hypothesis in the Sub-Saharan African region. We employed a panel data technique of analysis, drawing data from twenty-nine countries in the region. The data spanned 24 years (1991 to 2015). The inflation rate was captured using the consumer price index (CPI – its log first difference), while unemployment rate was measured by total unemployment (as a percentage of total labour force, a national estimate). Using a panel data analysis technique, our result showed that there was no significant relationship between inflation rate and the rate of unemployment (based on Two-Way FE), but One-Way FE and RE showed a rather significant trade-off. Though the conflicting results suggest an inconclusive outcome, the Two-Way FE (that was the technique in focus in this study), seems to invalidate the existence of the common Philip’s Curve (that is, unemployment-inflation trade-off) in the Sub-Saharan African region.},
     year = {2017}
    }
    

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    T1  - The Philip’s Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis
    AU  - Godwin Essang Esu
    AU  - Johnson Akpan Atan
    Y1  - 2017/12/25
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    DO  - 10.11648/j.jwer.20170605.11
    T2  - Journal of World Economic Research
    JF  - Journal of World Economic Research
    JO  - Journal of World Economic Research
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    SN  - 2328-7748
    UR  - https://doi.org/10.11648/j.jwer.20170605.11
    AB  - In this study, we attempted the assessment of the validity of the Philip’s curve hypothesis in the Sub-Saharan African region. We employed a panel data technique of analysis, drawing data from twenty-nine countries in the region. The data spanned 24 years (1991 to 2015). The inflation rate was captured using the consumer price index (CPI – its log first difference), while unemployment rate was measured by total unemployment (as a percentage of total labour force, a national estimate). Using a panel data analysis technique, our result showed that there was no significant relationship between inflation rate and the rate of unemployment (based on Two-Way FE), but One-Way FE and RE showed a rather significant trade-off. Though the conflicting results suggest an inconclusive outcome, the Two-Way FE (that was the technique in focus in this study), seems to invalidate the existence of the common Philip’s Curve (that is, unemployment-inflation trade-off) in the Sub-Saharan African region.
    VL  - 6
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Author Information
  • Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Nigeria

  • Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Nigeria

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