Output-inflation tradeoffs in industrial and developing countries

Abstract

This paper presents further international evidence on output-inflation tradeoffs implied by Lucas's model of the Phillips curve. Various relationships among the output-inflation trade-off coefficient and variances of the nominal shocks and the general price level implied by the theoretical model are evaluated among two groups of countries. These relationships are strongly confirmed for nineteen industrial countries, but are only moderately supported for the group of thirty-seven developing countries.