Critique of Phillips Curve: A Case Study of Zimbabwe Economy

Shame Mukoka

doi:doi:10.11648/j.eco.20190801.12

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Critique of Phillips Curve: A Case Study of Zimbabwe Economy

Shame Mukoka

Published in Economics (Volume 8, Issue 1)

Received: 6 April 2018 Accepted: 20 April 2018 Published: 27 February 2019

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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.

Published in	Economics (Volume 8, Issue 1)
DOI	10.11648/j.eco.20190801.12
Page(s)	8-13
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Inflation, Unemployment, Stationarity and Ordinary Least Squares

References

[1]	Resurreccion P, F. (2014). ‘Linking unemployment to inflation and economic growth in the Philippines’: Asian Journal of Economic Modelling 2(4): 156-168.
[2]	Friedman, M. (1968), ‘The Role of Monetary Policy’, 58(1) American Economic Review.
[3]	Akerlof, George A.; Dickens, William T.; Perry, George L. (2000). ‘Near-Rational Wage and Price Setting and the Long-Run Phillips Curve’. Brookings Papers on Economic Activity. 2000 (1): 1–60.
[4]	Zivanomoyo, J and Mukoka S. (2015). ‘An empirical Analysis of the Impact of Unemployment on Economic Growth in Zimbabwe’. Society for Science and Education, United Kingdom.
[5]	Phillips A, W. (1958). ‘The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom 1861–1957’, referring to unemployment and the ‘change of money wage rates’.
[6]	Oliver, H. (2010) ‘US Money Demand, Monetary Overhang, and Inflation Prediction’ International Network for Economic Research working paper no. 2010.4.
[7]	Forder, J. (2014). ‘Macroeconomics and the Phillips Curve Myth’. Oxford University Press. ISBN 978-0-19-968365-9.
[8]	Balami, G. (2006). ‘Innovation and Growth in Developing Countries’, Journal of Development Economics, July. Growth in Developing Countries, Journal of Economic Literature, 33(3), September Growth in the Global Economy (Cambridge, Mass: MIT Press).
[9]	World Bank (1998). ‘World Development Indicators’, Washington, D. C. The World Bank.
[10]	Okafor, E. E (2011). ‘Youth Unemployment and Implications for Stability of Democracy in Nigeria. JSDA, 13(1)’. http://www.jsdafrica.com/Jsda/V13No1
[11]	ILO (1998). ‘The new institutional economic, approach world development’. International LabourOrganisation. World Labour Report, Geneva, ILO Office.
[12]	Lindbeck, 1999. Unemployment-Structural Paper. Institute of International Economics Studies: S-10691 Sweden.
[13]	Abachi (1998). Unemployment and inflation in Nigeria. www.coursehero.com BahauddinZakariyauniversity.
[14]	Sanda, R. (2006). Nigeria: ‘Youth Unemployment, Poverty - a Time Bomb for Country’. Leadership, Wednesday, 27 August.
[15]	Hargreaves-Heap S. P. (1980). ‘Choosing the Wrong Natural Rate: Accelerating Inflation or Decelerating Employment and Growth’, Economic Journal, 90, 611-620.

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Shame Mukoka. (2019). Critique of Phillips Curve: A Case Study of Zimbabwe Economy. Economics, 8(1), 8-13. https://doi.org/10.11648/j.eco.20190801.12

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ACS Style

Shame Mukoka. Critique of Phillips Curve: A Case Study of Zimbabwe Economy. Economics. 2019, 8(1), 8-13. doi: 10.11648/j.eco.20190801.12

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AMA Style

Shame Mukoka. Critique of Phillips Curve: A Case Study of Zimbabwe Economy. Economics. 2019;8(1):8-13. doi: 10.11648/j.eco.20190801.12

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@article{10.11648/j.eco.20190801.12,
  author = {Shame Mukoka},
  title = {Critique of Phillips Curve: A Case Study of Zimbabwe Economy},
  journal = {Economics},
  volume = {8},
  number = {1},
  pages = {8-13},
  doi = {10.11648/j.eco.20190801.12},
  url = {https://doi.org/10.11648/j.eco.20190801.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20190801.12},
  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.},
 year = {2019}
}

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TY  - JOUR
T1  - Critique of Phillips Curve: A Case Study of Zimbabwe Economy
AU  - Shame Mukoka
Y1  - 2019/02/27
PY  - 2019
N1  - https://doi.org/10.11648/j.eco.20190801.12
DO  - 10.11648/j.eco.20190801.12
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 8
EP  - 13
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20190801.12
AB  - 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.
VL  - 8
IS  - 1
ER  -

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Author Information

Shame Mukoka

Faculty of Commerce, Zimbabwe Open University, Harare, Zimbabwe

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Shame Mukoka. (2019). Critique of Phillips Curve: A Case Study of Zimbabwe Economy. Economics, 8(1), 8-13. https://doi.org/10.11648/j.eco.20190801.12

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ACS Style

Shame Mukoka. Critique of Phillips Curve: A Case Study of Zimbabwe Economy. Economics. 2019, 8(1), 8-13. doi: 10.11648/j.eco.20190801.12

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AMA Style

Shame Mukoka. Critique of Phillips Curve: A Case Study of Zimbabwe Economy. Economics. 2019;8(1):8-13. doi: 10.11648/j.eco.20190801.12

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@article{10.11648/j.eco.20190801.12,
  author = {Shame Mukoka},
  title = {Critique of Phillips Curve: A Case Study of Zimbabwe Economy},
  journal = {Economics},
  volume = {8},
  number = {1},
  pages = {8-13},
  doi = {10.11648/j.eco.20190801.12},
  url = {https://doi.org/10.11648/j.eco.20190801.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20190801.12},
  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.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Critique of Phillips Curve: A Case Study of Zimbabwe Economy
AU  - Shame Mukoka
Y1  - 2019/02/27
PY  - 2019
N1  - https://doi.org/10.11648/j.eco.20190801.12
DO  - 10.11648/j.eco.20190801.12
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 8
EP  - 13
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20190801.12
AB  - 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.
VL  - 8
IS  - 1
ER  -

Copy | Download