Authors :
Tanja Mirotić
Volume/Issue :
Volume 7 - 2022, Issue 7 - July
Google Scholar :
https://bit.ly/3IIfn9N
Scribd :
https://bit.ly/3SZR5OD
DOI :
https://doi.org/10.5281/zenodo.7007072
Abstract :
Through history, the relationship between
inflation and unemployment, has been represented with
Philips curve model, which is highly prominent in
macroeconomic theory and practice till this day. Proof of
the relevance of this theoretical concept is the fact that
there is no textbook in the field of macroeconomics, nor
monetary economics, that does not include the Phillips
curve in its content. Given that the appearance and
disappearance of the inverse relationship between the
inflation rate and the unemployment rate is impossible
to predict, constant empirical research is conducted to
test the validity of the Phillips curve in modern
economies. The purpose of this paper is to formulate a
suitable model of the Phillips curve for Montenegro and
evaluate it based on empirical data taken from the
website of the Central Bank of Montenegro.
Keywords :
inflation, unemployment, Philips curve, dummy variables.
Through history, the relationship between
inflation and unemployment, has been represented with
Philips curve model, which is highly prominent in
macroeconomic theory and practice till this day. Proof of
the relevance of this theoretical concept is the fact that
there is no textbook in the field of macroeconomics, nor
monetary economics, that does not include the Phillips
curve in its content. Given that the appearance and
disappearance of the inverse relationship between the
inflation rate and the unemployment rate is impossible
to predict, constant empirical research is conducted to
test the validity of the Phillips curve in modern
economies. The purpose of this paper is to formulate a
suitable model of the Phillips curve for Montenegro and
evaluate it based on empirical data taken from the
website of the Central Bank of Montenegro.
Keywords :
inflation, unemployment, Philips curve, dummy variables.
