The Australian Phillips curve and more

TL;DR

This paper presents a quantitative model linking inflation and unemployment to labor force changes, validated across multiple developed countries, using empirical data and cumulative curve fitting techniques.

Contribution

It introduces a linear model connecting inflation, unemployment, and labor force change, validated with empirical data across several developed nations.

Findings

Model accurately fits historical data for Australia and other countries

Linear relationships are consistent across different developed economies

Cumulative curves improve model fitting and validation

Abstract

A quantitative model is presented linking the rate of inflation and unemployment to the change in the level of labor force. The link between the involved variables is a linear one with all coefficients of individual and generalized models obtained empirically. To achieve the best fit between measured and predicted time series cumulative curves are used as a simplified version of the 1-D boundary elements method. All models for Australia are similar to those obtained for the US, France, Japan and other developed countries and thus validate the concept and related quantitative model.