Volume 8, Issue 1, March 2019, Page: 8-13
Critique of Phillips Curve: A Case Study of Zimbabwe Economy
Shame Mukoka, Faculty of Commerce, Zimbabwe Open University, Harare, Zimbabwe
Received: Apr. 6, 2018;       Accepted: Apr. 20, 2018;       Published: Feb. 27, 2019
DOI: 10.11648/j.eco.20190801.12      View  257      Downloads  90
Abstract
This study sought to determine the relationship between Inflation and Unemployment in Zimbabwe. The time series yearly data for Inflation and Unemployment from 1990 to 2017 were used for the study. Ordinary Least Squares (OLS) was used to determine the relationship between inflation on Unemployment. Some Stationarity and Cointegration tests were carried out. Data became stationarity after first differencing using Augmented Dickey Fuller Test. There was also evidence of cointegration between the two variables using the Johansen Cointegration Test. The results of the study established a stable and permanent inverse relationship between Inflation and Unemployment in Zimbabwe, conforming to the Phillips Curve. The Zimbabwean government should, therefore, work towards growing its economy through adopting a policy mix that embraces macro-economic indicators that have a direct impact on both inflation and unemployment.
Keywords
Inflation, Unemployment, Stationarity and Ordinary Least Squares
To cite this article
Shame Mukoka, Critique of Phillips Curve: A Case Study of Zimbabwe Economy, Economics. Vol. 8, No. 1, 2019, pp. 8-13. doi: 10.11648/j.eco.20190801.12
Copyright
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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