An empirical analysis of New Keynesian Wage Phillips Curve on Denmark, Sweden & Switzerland

In this paper, the New Keynesian Wage Phillips Curve (NKWPC) is being discussed. The purpose of this paper was to evaluate NKWPC in Denmark, Sweden and Switzerland during the period 2000Q4-2017Q4 and investigate negative repo rates effect on wage inflation. NKWPC is an enhanced model of the classic Phillips Curve that attempts to describe the dynamic relationship between wage inflation and unemployment. The model is estimated by executing OLS regressions. The paper concludes that there is evidence for applicability of NKWPC for Denmark and Switzerland, but not for Sweden. Further on, the study displays that the period with and without negative repo rates, are significantly different from each other