The role of inflation in shaping changes in the employment rate: evidence from EU
The role of inflation in shaping changes in the employment rate: evidence from EU

Summary/Abstract: RESEARCH OBJECTIVE: The objective of the article is to empirically verify the fundamental relationship implied by the Phillips curve: the relationship between the dynamics of employment and inflation in selected European Union countries.THE RESEARCH PROBLEMS AND METHODS: The research problem is to find out what effect inflation has on the evolution of the employment rate. The study was based on the scoping method used in the literature review. The empirical analysis used the distance-weighted least squares method and neural network analysis.THE PROCESS OF ARGUMENTATION: The first part examines the literature on the relationship between inflation and the employment rate. This is followed by an analysis that identifies the role of inflation on the employment rate in selected European Union countries.RESEARCH RESULTS: Our research has shown that changes in inflation can contribute to explaining the formation of employment in examined European countries. At the same time, the analysis revealed that the impact of inflation on the employment rate is relatively low.CONCLUSIONS, INNOVATIONS, AND RECOMMENDATIONS: The implications of the Phillips curve with regard to the relationship between inflation and the labour market are present. However, the relationship itself described is relatively weak with regard to other factors. The labour market in the European Union is multi-dimensional and is shaped by a number of factors.

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