Paradigms
A Research Journal of Commerce, Economics, and Social Sciences
Online ISSN: 2410-0854
Print ISSN: 1996-2800
 
     
 

Paradigms Journal

Phillips Curve In A Small Open Economy: A Time Series Exploration Of North Cyprus
Author(s) :
Muhammad Shahbaz
Faridul Islam
Muhammad Shahbaz Shabbir
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.
Keywords: Inflation; Unemployment; ADF; Cointegration; DOLS.
 
 

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