A Retrospective View of the Phillips Curve and Its Empirical Validity since the 1950s

Since the 1960s, the Phillips curve has survived various significant changes (Kuhnian paradigm shifts) in macroeconomic theory and generated endless controversies. This dissertation revisits several important, representative papers throughout the curve's four historical, formative periods: Phillips' foundational paper in 1958, the wage determination literature in the 1960s, the expectations-augmented Phillips curve in the 1970s, and the latest New Keynesian iteration. The purpose is to provide a retrospective evaluation of the curve's empirical evidence. In each period, the preeminent role of the theoretical considerations over statistical learning from the data is first explored. To further appraise the trustworthiness of empirical evidence, a few key empirical models are then selected and evaluated for their statistical adequacy, which refers to the validity of the probabilistic assumptions comprising the statistical models. The evaluation results, using the historical (vintage) data in the first three periods and the modern data in the final one, show that nearly all of the models in the appraisal are misspecified - at least one probabilistic assumption is not valid. The statistically adequate models produced from the respecification with the same data suggest new understandings of the main variables' behaviors. The dissertations' findings from the representative papers cast doubt on the traditional narrative of the Phillips curve, which the representative papers play a crucial role in establishing.

Name thesis:degree_name

Doctor of Philosophy

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Economics

Department dc:contributor.department

Economics

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2021

Author dc:creator

• Do, Hoang-Phuong

Chair dc:contributor.committeechair

• Spanos, Aris

Committee members dc:contributor.committeemember

• Miller, Melinda
• Tsang, Kwok Ping
• Luo, Shaowen

• Phillips Curve
• Empirical Evaluation
• Statistical Adequacy
• Macroeconomic History

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Dc Identifier Other

vt_gsexam:30121

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/103230