The Phillips Curve Is a Relationship in Macroeconomics Between the Inflation

question 10

Essay

The Phillips curve is a relationship in macroeconomics between the inflation rate (inf)and the unemployment rate (ur). Estimating the Phillips curve using quarterly data for the United States from 1962:I to 1995:IV, you find $\widehat{\text { Inf t}}$ = 4.08 + 0.118 ur_t, R² = 0.003, SER = 3.148
(1.11)(0.176)
(a)Explain why, at first glance, this is a surprising result.
(b)Do you think that there is omitted variable bias in the regression?
(c)What other threats to internal validity may be present?
(d)If you could find a proper specification for the Phillips curve using United States data, what external validity criteria would you suggest?

---

Definitions:

Digital Media

Forms of media content and products that are created and consumed using digital technology, including websites, social media, and online videos.

Digital Media

Various forms of media content that are encoded in machine-readable formats, allowing for creation, viewing, distribution, modification, and preservation electronically.