Abstract
The paper explores the existence and the stability of Phillips curve for North
Cyprus, a small developing economy, using time series data. ADF unit root
test is employed to check for stationarity. ARDL and DOLS approaches to
cointegration have been used to explore the long run relation and ECM to
understand short run dynamics. The predictive properties DOLS are better
than those of the conventional methods. The estimates point to the existence
of Phillips curve both in the long and the short run. CUSUM and CUSUMsq
tests confirm a stable relation.
MUHAMMAD SHAHBAZ, FARIDUL ISLAM, MUHAMMAD SHAHBAZSHABBIR. (2011) PHILLIPS CURVE IN A SMALL OPEN ECONOMY: A TIME SERIES EXPLORATION OF NORTH CYPRUS , Paradigms , Vol 5, Issue 1.
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