THESIS ON OKUNS LAW
The long run Phillips curve is graphically represented by a vertical line at the natural rate of unemployment, whereby any attempts to change the rate of unemployment simply serve to move the economy up and down the vertical line. I honestly would pick something else if you haven’t learned panel already because the 2SLS methods that are more commonly used in research are more commonly masters or PhD level methods. They used cointegration test and Granger causality test, and their findings revealed that for the Greek economy, the Phillips curve exists only in the long run, unlike in the short-run. There is short run tradeoff relationship between inflation and unemployment. There is significant relationship between inflation and unemployment.
Okun’s law and the financial crisis. However, the present research differs from the study of Ogbokor and Shofotoka in such a manner that, firstly, it used shorter and time series recent data. Get an ad-free experience with special benefits, and directly support Reddit. Therefore, the Phillips curve denotes the impossibility of lowering the rates of unemployment and inflation simultaneously. However, it decreased drastically to 0. The unit root test indicated that, inflation rate, unemployment rate and real GDP are non-stationary I level form.
Overall performance of the models Econometric Framework and Model Specification A practical Guide 6 Ed.
Education on the importance of saving may also help to curb inflation in Namibia in order to follow the footsteps of Japan that saves more than consuming and thereby curb demand inflation. In general, according to Phillipsthere is an inverse relationship between inflation and unemployment. There is significant relationship between inflation and unemployment. However, the present research differs from the study of Ogbokor and Shofotoka in such a manner that, firstly, it used shorter and time series recent data.
The unit root test indicated that, inflation rate, unemployment rate and real GDP are non-stationary I level form. From toit had declined again by 7.
As other people are saying it would be better to approach it with a time series analysis unfortunately, I think that they don’t teach that at the undergrad level program in Economicsbut you can always just use an OLS.
First person and active tense is preferable. The long-run Phillips curve does not hold the anticipated inflation rate constant, though it holds the natural rate of unemployment constant, and that is what differentiates it from the short-run curve. No Unit root stationary Augmented Dickey Fuller test and Phillips-Perron test of unit root is used to test the stationarity of the variables.
(PDF) The Relevance of The Phillips pdf | Johanna Pangeiko Nautwima –
Conversely, other studies that employed the data of recent years revealed stagflation that shows that inflation and unemployment have the tendency of moving in the pkuns direction. The study utilized yearly data set fromin exclusion of and when there was a global financial shock. His result showed an inverse relationship between the two variables. The nexus shows that unemployment and inflation had been increasing and decreasing respectively throughout the study period, except in when they both decreased by almost the same rates.
Similarly, in the case of Namibia, another investigation was done by Shifotoka using the okund encompassing the years for the oil shocks, as well as when there was global financial crisis that had sharply boomed unemployment without lessening much the rate of inflation, as stated by IMF Apart from the introduction of the two types of the Phillips curve, Friedman had also emphasized on the expectations theory, which is the idea that the expectations for the individuals with regard to economic events have impacts on the economic outcomes, to be specific.
Her results resemble the findings of Kurnstshowing an inverse relationship between inflation and unemployment, which confirmed the existence of the Phillips curve in Namibia. Additionally, their findings attested a positive effect of unemployment on GDP, unlike on inflation.
Federal Reserve Bank of Boston. Journal of Social Sciences, 1 4 Kkuns model was used for the analysis, encompassing unit root test that was used to test for stationarity, as well as Bivariate approach. Their results showed a negative relationship between inflation and unemployment, confirming the existence of the Phillips curve in the Indian economy.
Introduction The current chapter reviews the theoretical and related empirical literatures with respect to the Phillips curve, assessing the relationship between thwsis and unemployment. Amputu for assisting me on the use of E-views. The overall regression is significant for the first and second models, unlike in the third model when is insignificant.
The chapter is divided into four subdivisions whereby section 3.
In the other vein, a few studies on the validity of the Phillips curve with a special reference to Namibia have been done and they showed different results. Data and data sources The study focused the quantitative approach using time-series secondary data.
It covers three sections. With a special reference to Namibia, the country has been experiencing some fluctuations in the rate omuns both inflation and unemployment.
There is short run tradeoff relationship between inflation and unemployment. I would also like to thank all my lecturers and other staff members of the Economics Department from the Savitribai Phule Pune University in general.
That would enhance local production, encourage export of surplus production and thereby reduce the rate of unemployment.