Romania's Inflation Tied to Output Gap, Unemployment Rates Show Minimal Difference
The article estimates the New Keynesian Phillips curve for the Romanian economy. It looks at how inflation is related to the gap between actual and potential output, as well as the natural and cyclical unemployment rates. Two models were tested, showing that the Phillips curve is not very different between them. The forward-looking part of the curve is only slightly larger than the backward-looking part in both cases.