Wang, Qunyong, Cai, Huifen and Wu, Na (2010) Nonlinear Characteristics of Phillips Curve: The International Evidence from Panel Data. In: British Association for Chinese Studies BACS Annual Conference, 8th-9th September 2010, Bristol, UK.

The paper utilizes international panel data of OECD countries during 1971~2007, such as
employment rate and inflation rate, etc., to investigate the nonlinear characteristics of the
Phillips curve. It is shown that the Phillips curve is not a simple linear relation; instead, there
is an obvious nonlinear characteristic. Using the panel threshold model and smooth
transition model, it is shown that the relation between inflation rate and unemployment rate
changes with the change in inflation rate. The substitution relation between them is very
obvious under high inflation, but the obviously weakened and even disappears in low
inflation condition.

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