In this paper we exploit two relevant economic relationships, the Phillips Curve and the Okun’s Law, to analyze the socioeconomic effects arising from the diffusion of the Net Economy in important economic aggregates, the G7 group of advanced economies and the Euro Area, representing the Countries in which these events were more significant. As an international comparison of different size scale it is also proposed a specific analysis for the Italian case. Economic aggregates were chosen because, remaining homogeneous within them, should express a clearer and linear trend for the two relationships, between variables related to inflation, unemployment and the change in GDP. In these contexts should be attenuated exogenous influences, that would otherwise alter the behavior of some variables. The idea is to jointly exploit the significance of these two reports, both built from the observation of empirical relationships persisted in the 50s, that will be searched in the latest data of the same economic variables. Given sufficiently long time series, representative of phenomena occurring in recent decades, we also expect to have particular values in the analysis because of the international economic and financial crisis, especially with reference to the period 2008-09. Our analysis of dependence between variables have as discriminant the year 1995, in which traces the birth of the Net Economy, for the G7 and Italy. For the Euro Area we consider 2002, the year in which there was the introduction in monetary circulation of the single European currency 6 In the first part of the paper are exposed the development of the two mentioned reports, from the original formulations to the most recent works relevant to our analysis. It is paid particular attention to those works that, as in this paper, exploit jointly the two relationships, that provide greater explanatory power of socioeconomic phenomena. Empirical analysis of the relationships of dependence from the Phillips and Okun relations are subsequently exposed. One conclusion of our analysis is that in the current debt-crisis-caused Great Recession, there are convincing reasons for the Political economy to support employment without increasing prices and to meet Fiscal Compact restrictions.
Monetary Stability, Employment Dilemma and Debt-crisis-caused Great Recession: is it Possible to Support Aggregate Demand?
MATTOSCIO, Nicola;ODOARDI, IACOPO
2012-01-01
Abstract
In this paper we exploit two relevant economic relationships, the Phillips Curve and the Okun’s Law, to analyze the socioeconomic effects arising from the diffusion of the Net Economy in important economic aggregates, the G7 group of advanced economies and the Euro Area, representing the Countries in which these events were more significant. As an international comparison of different size scale it is also proposed a specific analysis for the Italian case. Economic aggregates were chosen because, remaining homogeneous within them, should express a clearer and linear trend for the two relationships, between variables related to inflation, unemployment and the change in GDP. In these contexts should be attenuated exogenous influences, that would otherwise alter the behavior of some variables. The idea is to jointly exploit the significance of these two reports, both built from the observation of empirical relationships persisted in the 50s, that will be searched in the latest data of the same economic variables. Given sufficiently long time series, representative of phenomena occurring in recent decades, we also expect to have particular values in the analysis because of the international economic and financial crisis, especially with reference to the period 2008-09. Our analysis of dependence between variables have as discriminant the year 1995, in which traces the birth of the Net Economy, for the G7 and Italy. For the Euro Area we consider 2002, the year in which there was the introduction in monetary circulation of the single European currency 6 In the first part of the paper are exposed the development of the two mentioned reports, from the original formulations to the most recent works relevant to our analysis. It is paid particular attention to those works that, as in this paper, exploit jointly the two relationships, that provide greater explanatory power of socioeconomic phenomena. Empirical analysis of the relationships of dependence from the Phillips and Okun relations are subsequently exposed. One conclusion of our analysis is that in the current debt-crisis-caused Great Recession, there are convincing reasons for the Political economy to support employment without increasing prices and to meet Fiscal Compact restrictions.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
