Our theoretical model for investigating the effects of IT is based on the Phillips curve. In its most general specification, the Phillips relationship takes the form ( ) ( ) , e t t t t t LL ε Π =Π + + + DS θγ (1)where Π = rate of inflation, Πe = private-sector expected inflation rate, D = vector of various demand shocks, S = vector of various supply shocks, θ(L), γ(L) = vector of polynomials in the lag operator L, ε = white-noise error term.