This study revisits the trade-off relationship between inflation and
unemployment rates for the USA, as observed by the traditional Philips curve.
Annual data are used from 1930 to 2016. The ARDL Bounds Testing approach is
applied accompanying efficient unit roots testing [(DF-GLS) and (Ng-Perron) tests]
and the determination of the order of integration of the variables in levels. The
ARDL Bounds testing estimates confirm co-integration between the above variables.
The estimates of error-correction model (ECM) clearly support the existence of the
traditional Philips curve for the long run, but subdued for the short run. However,
there is evidence of short-run interactive feedback effect between the variables.