ANALYSIS OF SUBSTITUTION CHANGES IN THE PHILLIPS CURVE IN V4 COUNTRIES OVER THE COURSE OF ECONOMIC CYCLES

Abstract

The aim of the article is to determine the nature and intensity of the slope of the Phillips curves (PCs) for the workers vulnerable to unemployment in the individual phases of the economic cycle between 2000 and 2016 in the Visegrad Group (V4). We use linear regressions to substitute the household deflator of unemployment. In order to avoid a reduction in the number of observations and to reduce the validity of the estimates, which is characteristic of the Break model, we modify the one-year model of the categorical variable phase of the cycle. The results obtained are compared with the findings of international authors. Throughout the monitored period, a statistically significant negative slope of the PC was found in all V4 countries, with the highest intensity in the Czech Republic and the lowest in Hungary. The extrapolation of the trend of the current development of the phases of the economic cycle indicates the growth of the statistically confirmed negative slope of the PC in the Czech Republic, its return to Slovakia, its origin in Hungary and the return of positive inclination in Poland.

Data:
Received: 4 Sep 2020
Revised: 26 Oct 2020
Accepted: 6 Dec 2020
Published: 20 Dec 2020