Validity of the Phillips Curve in OECD Countries: Panel Data Analysis

The main objective of the study is to analyze the validity of the Phillips curve for 38 OECD countries using annual unemployment rate and inflation rate data covering the period 1991-2023. For this purpose, in the analysis part of the study, the cointegration relationship between unemployment and inflation variables is tested with the Panel Fourier cointegration test. Panel IFE method was used for the long-run coefficient estimates between the variables. According to the results of the analysis, it is concluded that there is an econometrically significant and negative relationship between inflation and unemployment variables. Therefore, it is determined that the Phillips curve is valid for OECD countries. Based on the findings, policymakers in OECD countries should consider the inflation risk when implementing expansionary policies to reduce unemployment or be prepared for an increase in unemployment when implementing contractionary policies to reduce inflation.