Research Discussion Paper – RDP 2021-09 Is the Phillips Curve Still a Curve? Evidence from the Regions

Contents

• Introduction
• Background on the Phillips Curve and the RBA's Modelling Approach
• Is the Phillips Curve Still a Curve?
• Data
• Benchmark Linear Model
• Allowing for Kinks in the Phillips Curve
• Comparison to Aggregate Models
• Robustness
• Conclusion
• Appendix A: RBA Aggregate Wage Phillips Curve Specification, Coefficients and Implied Slope
• Appendix B: Local Labour Market Definitions
• Appendix C: Geographic Classifications and Robustness
• Appendix D: Persistence in Unemployment Fluctuations
• References

For helpful comments and suggestions, we thank Natasha Cassidy, Keaton Jenner, Callum Jones, Gianni La Cava, Gabriela Nodari, Matthew Read, John Simon and seminar participants at the Reserve Bank of Australia. Some of the findings of this RDP were discussed in Lowe (2021). The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Reserve Bank of Australia. The authors are solely responsible for any errors. Our programs and publicly available data are available at <https://www.rba.gov.au/publications/rdp/2021/2021- 09/supplementary-information.html>.