How to Write a Summary of an Article? Inflation and Unemployment Macroeconomics help Name:
Even the fastest growing Chinese economy is not totally immune to it. The purpose of this research is to analyze the relationship that exists between these two macroeconomic variables, which affect every nation as well as an individual.
The Phillips curve shows a historical inverse relation between the rate of unemployment and the rate of inflation in an economy. It is the trade-off between inflation and unemployment Mankiw, The lower the unemployment in an economy, the higher the rate of change in wages paid to labor in that economy.
Different studies have been conducted related to these variables in order to see whether any relationship between these two macroeconomic variables exists or not. In India and Philippines the tradeoff between inflation and unemployment does not exist, whereas, in Japan, Korea, Singapore, and Hong Kong it does.
However unemployment in comparison with inflation depresses people more than inflation. A strong positive relation between unemployment rate and inflation rate lagged one or two years is also shown, which is inconsistent with both Philips curve and NAIRU.
In other words the trade-off between inflation and unemployment rate does not exist, except in the same year, and in the long run unemployment is a positive function with inflation Niskanen Namibia, using the time series data fromexhibits the presence of stagflation in its economy.
In other words he found increase in both inflation and unemployment at the same time, which contradicts the traditional short-run Philips curve Ogbokor Furuoka using the data of Malaysia from shows and existence of co-integrated as well as casual relationship between inflation and unemployment.
That is the study provides an empirical evidence to support the Philips curve. Likewise, Philips curve also exists in Japan, with negative coefficients of linear link between inflation and unemployment.
Also there is a generalized linear and lagged relationship between labor force, unemployment and inflation in Japan, which is confirmed by the fact that the driving force behind unemployment and inflation is the change rate of labor force level Kitov In this paper, a Philips curve with linear link will be calculated for Pakistan to see if the negative relationship between the variables exists or not.
What is the likely relationship between inflation and unemployment in Pakistan? If unemployment increases, then inflation decreases. Secondary data for the purpose of this research has been obtained from the year The data on unemployment rate percentage of total labor force and inflation rate general not adjusted for food and energy for Pakistan, has been taken from the Economic Survey of Pakistan.
Objective The objective of this research is to determine the relationship between inflation and unemployment for the economy of Pakistan.
Philips curve is based on the equation where unemployment is the function of inflation. The functional form of the model which is as follows: The Equation obtained after running the OLS model is:We will write a custom essay sample on Inflation and Unemployment specifically for you.
for only $/page. Order Now. W. , peg 3).
When the rate of unemployment is low, the level of inflation is high and when the level of employment is high, inflation level is low. How Unemployment And Inflation Affect Gdp In Eu Economics Essay. Print The aim is to measure by how much changes in unemployment and inflation affect GDP per capita of European countries.
If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link. The aim of the paper “Measurements of Unemployment and Inflation” is to evaluate the measurement of unemployment rate within the context of effective management strategies development.
Inflation Introduction: Nowadays, more people pay their attentions on one word, “inflation”, because of the weak global economy. Inflation is when rising of general price level for goods and services happens with decreasing of purchasing power for people.
Unemployment and inflation are two intricately linked economic concepts. Over the years there have been a number of economists trying to interpret the relationship between the concepts of inflation . In other words the trade-off between inflation and unemployment rate does not exist, except in the same year, and in the long run unemployment is a positive function with inflation (Niskanen ).
Namibia, using the time series data from , exhibits the presence of stagflation in its economy.