Inflation and unemployment: the evicence from Malaysia

Wong, Hock Tsen (1995) Inflation and unemployment: the evicence from Malaysia. (Unpublished)

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Abstract

One of the major issues in Macroeconomics theory concerns the possible role of reduced inflation and elimination ojunemployment. This paper aims to examine the relationship between inflation and unemployment rates in Malaysia. ' For this purpose, cointegration test was used The results show that there was no evidence of cointegration. This implied that inflation and unemployment rates was not moving together in the same direction in the long-run. Furthermore, a model of inflation was proposed which included the sources of inflation from money supply, excess demand for labour, and imported injlatiOn. The model was estimated with the used of Ordinal Lease Squares (OLS) method. The estimated result showed that the relationship between inflation and unemployment rates was inverse. This supports the earlier results obtained which used cointegration test. The inverse relationship implied that reducing the inflation rate will cause unemployment rate to increase or vice versa.

Item Type: Research Report
Uncontrolled Keywords: Inflation , Unemployment , Phillips Curve , Cointegration Test
Subjects: H Social Sciences > HD Industries. Land use. Labor
Depositing User: Noraini
Date Deposited: 23 Aug 2019 02:31
Last Modified: 23 Aug 2019 02:31
URI: http://eprints.ums.edu.my/id/eprint/23395

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