Economics and Business Review

ISSN 2392-1641
e-ISSN 2450-0097

Poznań University of Economics - Poland

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Volume 2 (16) Number 3 pp. 121-137

Dariusz Błaszczuk1

1Vistula University, Faculty of Business and International Relations,Warsaw, Poland

Simple four-step procedure of parabolic B curve determination for OECD countries in 1990Q1–2015Q4

Abstract:

In theory the short-term relationship between inflation and GDP rate is
known as the positive slope straight line SAS. In practice it is reflected by a concave
non-monotonic function.
The results of estimation depend on unusual observations. We propose a simple
four-step procedure: first, basic estimation based on all observations; then estimation
having ignored outliers; next, estimation on the average GDP rates for given inflation
rates for the same observations; lastly, estimation skipping outlying averages.
Empirical analysis for 26 OECD countries on quarterly data brought satisfactory results.
They justified the determination of optimal GDP rate and corresponding inflation
for every country. Finally, recommendations for policymakers have been formulated.

pub/2016_3_121.pdf Full text available in in Adobe Acrobat format:
http://www.ebr.edu.pl/volume16/issue3/2016_3_121.pdf
Keywords: simple three-step procedure, parabolic B curve, optimal inflation, neutral inflation, inflation rate, GDP rate, relationship between inflation and GDP rate, OECD countries.

DOI: 10.18559/ebr.2016.3.8

For citation:

MLA Błaszczuk, Dariusz. "Simple four-step procedure of parabolic B curve determination for OECD countries in 1990Q1–2015Q4." Economics and Business Review EBR 16.3 (2016): 121-137. DOI: 10.18559/ebr.2016.3.8
APA Błaszczuk, D. (2016). Simple four-step procedure of parabolic B curve determination for OECD countries in 1990Q1–2015Q4. Economics and Business Review EBR 16(3), 121-137 DOI: 10.18559/ebr.2016.3.8
ISO 690 BłASZCZUK, Dariusz. Simple four-step procedure of parabolic B curve determination for OECD countries in 1990Q1–2015Q4. Economics and Business Review EBR, 2016, 16.3: 121-137. DOI: 10.18559/ebr.2016.3.8