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TOPIC
UNEMPLOYMENT AND INFLATION
OBJECTIVE
• To discuss the relationship between
unemployment and inflation according to
Phillips curve, whether is application or not, In
Pakistan
INTRODUCTION
Unemployment:
• The situation where people do not find jobs despite
of their willingness to work
Inflation:
• The increase in the price level. Purchasing power falls
and more money buy only few goods and service
―Inflation rate of Pakistan is 8.7 (2013-14)
―Unemployment rate of Pakistan is 6.2. (2013-14)
―Population Growth rate of Pakistan is 1.95
ANALYSIS
• Philips Curve:
• There is tradeoff between inflation and unemployment
rate in the short run.
• When unemployment decrease, inflation increases and
vice versa.
• In the long run there is no tradeoff between
unemployment and inflation rate.
Data from 2001-13
Year Inflation,consumer prices (annual %) Unemployment, total (% of labor force)
2001 3.148261446 7.400000095
2002 3.290344726 7.800000191
2003 2.914134701 7.699999809
2004 7.444624693 7.400000095
2005 9.06332737 7.099999905
2006 7.921084401 6.099999905
2007 7.598684411 5.099999905
2008 20.28612109 5
2009 13.64776506 4.900000095
2010 13.88113926 5
2011 11.91676947 5
2012 9.68505341 5
2013 7.689503655 5.099999905
GRAPH
Reasons of Applicability of Phillips Curve
• Pakistan is facing stagflation
• GDP is not Increasing as our economy needs
Reasons of Applicability of Phillips Curve
• Political instability
• Terrorism
• Budget deficit
• Money supply
• Indirect taxes
• Job opportunities
Reasons of Applicability of Phillips Curve
• Demonstration effect
• Slow industrial growth
• Net import
• Population growth rate ( 1.95%)
• Mechanization in agriculture sector
CONCLUSION
• Coordination among policies
• Proper planning
• Forecast inflation
• GDP must grow
inflation and unemployment in Pakistan :data 2000-11

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inflation and unemployment in Pakistan :data 2000-11

  • 1.
  • 3. OBJECTIVE • To discuss the relationship between unemployment and inflation according to Phillips curve, whether is application or not, In Pakistan
  • 4. INTRODUCTION Unemployment: • The situation where people do not find jobs despite of their willingness to work Inflation: • The increase in the price level. Purchasing power falls and more money buy only few goods and service ―Inflation rate of Pakistan is 8.7 (2013-14) ―Unemployment rate of Pakistan is 6.2. (2013-14) ―Population Growth rate of Pakistan is 1.95
  • 5. ANALYSIS • Philips Curve: • There is tradeoff between inflation and unemployment rate in the short run. • When unemployment decrease, inflation increases and vice versa. • In the long run there is no tradeoff between unemployment and inflation rate.
  • 6. Data from 2001-13 Year Inflation,consumer prices (annual %) Unemployment, total (% of labor force) 2001 3.148261446 7.400000095 2002 3.290344726 7.800000191 2003 2.914134701 7.699999809 2004 7.444624693 7.400000095 2005 9.06332737 7.099999905 2006 7.921084401 6.099999905 2007 7.598684411 5.099999905 2008 20.28612109 5 2009 13.64776506 4.900000095 2010 13.88113926 5 2011 11.91676947 5 2012 9.68505341 5 2013 7.689503655 5.099999905
  • 8. Reasons of Applicability of Phillips Curve • Pakistan is facing stagflation • GDP is not Increasing as our economy needs
  • 9. Reasons of Applicability of Phillips Curve • Political instability • Terrorism • Budget deficit • Money supply • Indirect taxes • Job opportunities
  • 10. Reasons of Applicability of Phillips Curve • Demonstration effect • Slow industrial growth • Net import • Population growth rate ( 1.95%) • Mechanization in agriculture sector
  • 11. CONCLUSION • Coordination among policies • Proper planning • Forecast inflation • GDP must grow