The Situation of Inflation Hysteresis in OECD Countries: Empirical Evidence
Chapter from the book:
Alpağut,
S.
(ed.)
2025.
Macroeconomic Research- 1.
Synopsis
The main objective of this study is to analyze the existence of inflation hysteresis in OECD countries, taking into account the period between 1991 and 2023. The study investigates the existence of inflation hysteresis using both Bai and Ng (2004) PANIC and PANIC Fourier panel unit root tests. The findings generally indicate that inflation hysteresis is not valid for the OECD countries as a group. The panel results of both tests suggest that there is no unit root in the inflation series, meaning that the shocks experienced by inflation rates do not leave lasting effects and return to their equilibrium levels over time.
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Copyright (c) 2025 Serhat Alpağut; Ayşe Eryer, Emre Şakar, Tuğba Konuk, Burak Uğur, Mehmet Aslan, Ayhan Kuloğlu, Sinem Doğan Erenel, Deniz Erenel, İdris Yağmur