erc/metu
INTERNATIONAL CONFERENCE IN ECONOMICS  IV
September 13-16, 2000, Ankara

The Natural Rate Hypothesis and the Inflation-output Trade-offs in New Zealand and Turkey

Wassah A. Razzak (Reserve Bank of New Zealand, New Zealand )

Abstract

This paper tests the hypothesis that the higher the variance of aggregate demand shocks (or average prices) the less favourable the short-run trade-off between inflation and real output (deviations from trend) in New Zealand and Turkey. Results indicate that New Zealand’s trade-off has improved significantly during the period of stable inflation, which can be a useful lesson for Turkey.

Economic Research Center
Middle East Technical University
06531 Ankara Turkey
Phone: + 90 312 210 3044, 210 2003
Fax: +90 312 210 1244
e-mail: metuerc@metu.edu.tr