Abstract
This empirical study has mainly examined the association
between inflation and unemployment in Pakistan. The study
has used the time series data from 1991 to 2015 and Eviews9
software to examine the existence of Philips Curve in the
economy. The empirical results of study reveal that inflation
was higher in 90’s era and simultaneously declining
unemployment trend was observed. From 2001 to 2005 inflation
rate was showing decreasing trend whereas unemployment was
showing increasing trend. The upward tendency of inflation
was recorded during 2005 to 2010. At the same time
unemployment rate was showing declining trend. Increased
inflation results into decreased unemployment rate which
ultimately increase employment opportunity in the country. As
demand for labor increased due to increase in employment
opportunities, results increase in wage rate which is paid by
producer to their labor. It causes to increase cost of production
of goods which leads to inflation. This research paper is an
observed support in existence of Phillips curve in Pakistan
Dr. Ghulam Muhammad Mangnejo , Saqib Wahab Mahar, Bakhtiar Ahmed. (2020) Inflation and Unemployment in Pakistan: An Empirical Analysis, Pakistan Social Sciences Review, Volume 4, Issue 2.
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