Date of Award

5-21-2020

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Rodrigo Schneider

Abstract

This paper examines the causes behind the flattening of the Japanese Phillips curve by analyzing the unemployment rate measure, and its role in the flattening of the curve. This paper will utilize the actual Japanese unemployment rates from 2002 through 2019, as well as estimate an alternative unemployment rates that takes into consideration discouraged workers. In my study, I recreate the Phillips curve using these two measures of unemployment, as well as implement a simple OLS regression to understand the slopes of each Phillips curves. I will also utilize the Weintraub equation in order to theorize factors that may be leading to the flattening of the curve. I hypothesize that the Phillips curve still maintains the correct relationship, but there is an issue behind how we measure unemployment. However, my results conclude that Japan’s Phillips curve flattened more when utilizing the alternative unemployment rate rather than the actual unemployment rate. Furthermore, when applying a quadratic fit to the Phillips curve, it is evident that the recent Japanese Phillips curve has a concave relationship rather than displaying the traditional convex curve. I theorize that changes in the female labor force population within Japan is responsible for a decrease in the discouraged worker effect, thus causing a greater flattening of the curve.

Download

Share

COinS