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Cliometrica

, Volume 10, Issue 3, pp 345–364 | Cite as

Unemployment and inflation in Ireland: 1926–2012

  • Stefan Gerlach
  • Reamonn Lydon
  • Rebecca StuartEmail author
Original Paper

Abstract

Since the 1970s, the overarching view in the literature has been that a Phillips curve relationship did not exist in Ireland prior to the 1979 exchange rate break with Sterling. It was argued that, as a small open economy, prices were determined externally. To test this relationship, we study the determination of inflation between 1926 and 2012, a longer sample period than any previously used. We find that the difference between unemployment and the NAIRU is a significant determinant of inflation both in the full sample and in the subsamples spanning the periods before and after the Sterling parity link.

Keywords

Ireland Historical statistics Inflation Unemployment Import prices 

JEL Classification

E3 E4 N14 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.CEPRCentral Bank of IrelandDublin 2Ireland
  2. 2.Central Bank of IrelandDublin 2Ireland

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