Non-linear analysis of Post Keynesian Phillips curve in Canada labor market

Abstract

This paper aims to analyze Post-Keynesian Phillips Curve by using non-linear ARDL approach and non-linear Granger causality method for the period from 1957 to 2015 in Canada. This study is differed from other empirical paper by using non-linear ARDL method which determined there is long-run asymmetric relationship between the selected macroeconomic variables for Canada. Canada exhibits bi-directional causality relationship between inflation-unemployment, unemployment-economic growth and inflation-economic growth which refers that the country has flexible labor market.