Inflation dynamics in Algeria: estimation of the hybrid new Keynesian Phillips Curve

Abstract

The aim of this paper is to estimate the hybrid New Keynesian Phillips curve for Algeria on the period 1994-2011. In the first part, the hybrid New Keynesian Phillips curve is discussed theoretically for the purpose of highlighting the equation to be estimated. The second part is devoted to the presentation of the data. The obtained
results confirm those gotten in the literature. Our data analysis suggests that the nature of inflation dynamics in Algeria doesn’t match the hybrid New Keynesian Phillips curve.

Keywords: Inflation, Phillips curve, Output gap, Algeria

JEL CLASSIFICATION : E3, E5, C1