19th Annual Student Research Conference
Social Science
Empirically Examining the Phillip's Curve
Casey L. Copeland
Dr. Jane Sung, Faculty Mentor
The government is entrusted with the responsibility of ensuring that the economy is stable and healthy. It is expected to pursue several goals simultaneously: economic growth, low inflation, low unemployment, and improving overall welfare for its citizens. However, in order to pursue all of these goals simultaneously, it is important to understand the relationships between these variables. According to Phillip’s curve theory, inflation and unemployment are inversely related, so attempts to lower inflation will increase unemployment and vice versa. It is expected that this relationship will hold in the short run, but not in the long run. To test the validity of the Phillip’s Curve analysis, we used a linear regression model for both the short and long run with data from the Bureau of Labor Statistics which confirmed that the inflation and unemployment rates are negatively related in the short run and unrelated in the long run.
Keywords: Phillip's Curve, Inflation, Unemployment
Topic(s):Economics
Presentation Type: Oral Paper
Session: 12-2
Location: VH 1412
Time: 8:45