THE EVOLUTION OF UNEMPLOYMENT AND INFLATION IN ROMANIA FOR 23 YEARS. PHILLIPS CURVE
THE EVOLUTION OF UNEMPLOYMENT AND INFLATION IN ROMANIA FOR 23 YEARS. PHILLIPS CURVE

Summary/Abstract: This paper analyzes the evolution of unemployment and inflation in Romania over twenty-three years, as well as the analysis of the Phillips curve. To achieve this goal, in this paper was chosen to use a unifactorial simple regression model, highlighting the link between the inflation rate and the unemployment rate in Romania, from 1991 to 2013. The first part of the paper presented the theoretical notions regarding unemployment and its influence on macroeconomics, both nationally and globally, but also inflation and its causes. The second part contains a descriptive analysis of the indicators - inflation rate and unemployment rate - used in the regression model to be treated in the last chapter. The last part consists in the econometric analysis of the two indicators, through a unifactorial regression model. The data are taken from the website of the National Institute of Statistics and contain the values of the indicators over 23 years (1991-2013). The model allows to determine the extent to which the unemployment rate influences the inflation rate. Regarding the correlation between the rates of the two indicators, although theoretically there is an inverse link between them, a correlation suggested by the Phillips Curve and analyses of the data series may indicate exceptions to the rule, due mainly to the position of the curves; this fact is also determined by many other factors.

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