Short-term modified Phillips curves for the accession countries

Abstract

This study uses NAIRU short-term measures obtained using univariate methods as a basis to analyse inflation developments in the eight Central and Eastern European Countries (CEECs) that joined the European Union in 2004 during the transition process. The results point to the role of short-term NAIRU as an attractor and support a shifting natural rate hypothesis for unemployment in these countries.

Acknowledgements

The authors gratefully acknowledge the financial support from CICYT/FEDER Projects SEC2003-00516 (M. Camarero), SEC2002-03651 (C. Tamarit) and SEJ2004-05052/ECON (J. Ll. Carrion-i-Silvestre). M. Camarero and C. Tamarit are members of INTECO Research Group 03-151 AVCiT. We also thank Miguel León-Ledesma for kindly providing us the unemployment data. The usual disclaimer applies.