Correlation Between Unemployment And Inflation

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Kitov & Kitov (2011) provided an empirical model to check the impact of inflation and unemployment reactions to changes in the labor force in Switzerland using data from 1965 to 2010. Their overall, findings established that there exist long term equilibrium relations between the rate of labor force change and inflation rate. AMINU (2012) investigated the relationship between unemployment and inflation in Nigeria economy between 1977 and 2009. The results indicate that inflation had a negative impact on unemployment. The causality test reveals that there is no causation between unemployment and inflation in Nigeria during the period of study and a long-run relationship exists between them as confirmed by the co- integration test. Haq et…show more content…
it shows that there is negative relationship between inflation and unemployment, which means that there is trade-off between this two variables. The empirical review base on the paper that was reviewed during the study, most the reviewed paper reached the same conclusion as it was reached by theoretical model of having a negative or trade-off relationship between inflation and unemployment in their different focused environment. Only two of the researched paper that was reviewed shows the findings of positive relationship between inflation and unemployment. Meaning that their study found out that there is no trade –off between inflation and unemployment which is differs from the theoretical model. Chapter 3 Research Methodology and research techniques 3.1. Introduction Previous chapter reviewed the theoretical and empirical literature on the trade-off between inflation and unemployment. These couple theoretical and empirical review shed some light on the trade-off between inflation and unemployment. This section will build on that background to set the analytical framework used in this study. 2. Data sources The study will employ the annual data over the period of 1991-2014 that will make up the sample size of 24 years. The main reason why the sample size is small is because Namibia where the study is concentrating got independence in 1990 and the available and reliable
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