UNEMPLOYMENT AND ITS RELATIONSHIP WITH INFLATION

Abstract

Now the world exists in a market economy. It is characterized by cyclicality, which causes variation in macroeconomic indicators. One of such indicator is the unemployment. The issue of the unemployment, the identification of the unemployment factors, its scale and structure is a topical issue in most areas of economic development, both individual countries and the world economy as a whole. The reducing of the unemployment and stable inflation are considered the key to economic growth. The purpose of this article is to identify the relationship between the unemployment and the inflation and to clarify the direction of this relationship. The statistical research methods to study the dynamics of unemployment and inflation article were uses in the article. Correlation-regression analysis was also used in the paper. The study summarizes the approaches to the relationship between the unemployment and the inflation. The analysis of the unemployment rate in Ukraine was carried out and its structure was investigated. The main factors of the unemployment in Ukraine have been identified. The inflation rate in the country has been studied. It is concluded that Ukraine is characterized by constant outbreaks of inflation, and in crisis years also stagflation. A correlation analysis was applied, which proved that the Ukrainian economy is characterized by the predominance of the inflation over the unemployment, as a result of which there is a direct relationship between the indicators. The dynamics of unemployment rates and inflation rates in Greece are studied in the article. This country was chosen as the country with the highest unemployment rate and the lowest inflation rate. It was found that with the growth of the unemployment, the inflation in Greece was decreased. It is concluded that the relationship between the unemployment and the inflation in this country can be described by the Phillips curve. Turkey was chosen as the third country in the sample because it has a high rate of inflation. The dynamics of the unemployment rate and inflation rates in this country have been studied. It was concluded that the unemployment rate in Turkey is more stable than the inflation. Correlation analysis has shown that the strength of the relationship between the unemployment and the inflation in this country is insignificant and direct. It was found that for countries where inflation prevails, there is a direct relationship between indicators. In countries which characterized by high unemployment and small fluctuations in inflation, an inverse relationship can be observed. The identified pattern will significantly increase the efficiency of the organizational and economic mechanism for regulating the unemployment and the inflation.