ECONOMETRIC MODELING METHODS OF THE CAUSAL RELATIONSHIP BETWEEN INFLATION AND UNEMPLOYMENT

Abstract

Abstract: This scientific article studies the causal relationship between inflation and unemployment, one of the most complex problems of macroeconomics, using econometric modeling methods. The relevance of the article is that the state's monetary policy cannot balance the conflicting goals of ensuring price stability and increasing employment without precise mathematical calculations. To solve the problem, a pairwise linear regression model based on the method of least squares (LSM) and the theory of the Phillips curve were used. As a result of the study, an empirical equation was constructed based on conditional macroeconomic indicators, and the quantitative impact of changes in unemployment on the inflation rate was calculated. As a scientific contribution of the author, an inverse proportional relationship between unemployment and inflation in the short term was proven, and practical proposals were developed for regulators on conducting anti-inflationary policy.