Understanding the Relationship between Unemployment and Inflation in Nigeria

Idenyi, Odo Stephen; Favour, O. Elom-Obed; Johnson, Orace; Thomas, Olivier

doi:10.9734/air/2017/32218

Cited by 6 publications

(7 citation statements)

References 3 publications

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“…Inflation had a positive and significant relationship to unemployment because the magnitude of significance (column P) of 0.048 is lower than 0.05. The results of this study support the research of Hasan & Sun'an (2019), Anshori & Suparta (2018), Idenyi et al (2017), inflation increases unemployment significantly. The relationship between inflation and unemployment shows that inflation tends to cause unemployment.…”

Section: Discussionsupporting

confidence: 91%

“…The results of this study support the results of research by Brunt & Barilla (2018) on the effects of minimum wages on unemployment. The results of this study support the research results of Hasan & Sun'an (2019), Anshori & Suparta (2018), Idenyi et al (2017) on the effects of inflation on unemployment.…”

Section: Discussionsupporting

confidence: 91%

“…The relationship between inflation and unemployment has been studied by several researchers whose results show that inflation significantly increases unemployment (Hasan & Sun'an, 2019), (Anshori & Suparta, 2018), (Idenyi et al, 2017). Inflation increases unemployment insignificantly (Adarkwa, 2017), (Al-zeaud, 2014), (Elliot, 2015).…”

Section: Introductionmentioning

confidence: 99%

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Effect of Minimum Wages on Inflation and Unemployment in East Java - Indonesia

Suparta¹,

Ujianto²,

Murgianto³

2021

JESD

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Unemployment and inflation are two macroeconomic problems that have a trade-off, this means that the relationship between inflation and unemployment is negative and the relationship is also called the Phillips curve. The increase in the minimum wage is one of the causes of inflation and unemployment. This study aims to determine the relationship between minimum wage and inflation, the relationship between minimum wage and unemployment, the relationship between inflation and unemployment. This study uses panel data from 38 regions with the period 2010-2019 in East Java-Indonesia. Data is collected from the Central Bureau of Statistics of East Java. Data were analyzed with the Amos. The results showed that the real minimum wage had a negative and significant effect on inflation. Real minimum wages have a positive and significant effect on unemployment. Inflation has a positive and significant effect on unemployment. There is no trade-off between inflation and unemployment, this study does not support the Phillips curve. The real minimum wage has a direct negative effect on inflation, inflation has a positive effect on unemployment, thus causing the real minimum wage to have a negative effect indirectly on unemployment. The relationship between inflation and unemployment shows that higher inflation tends to lead to higher unemployment. The determination coefficient for inflation was 5.5 percent and the determination coefficient for unemployment was 2.3 percent.

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Section: Discussionsupporting

confidence: 91%

Section: Discussionsupporting

confidence: 91%

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Effect of Minimum Wages on Inflation and Unemployment in East Java - Indonesia

Suparta¹,

Ujianto²,

Murgianto³

2021

JESD

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“…Dalam jangka pendek hasil penelitian ini tidak sejalan dengan teori (Phillips, 1958) dimana peningkatan tingkat inflasi diterjemahkan menjadi penurunan tingkat pengangguran. Secara empiris hasil penelitian ini tidak sejalan dengan temuan Alisa (2015), Idenyi, Favour, Johnson, & Thomas (2017), Kasseh, (2018) yang menyatakan bahwa hubungan antara inflasi dan pengangguran berbanding terbalik ada dalam jangka pendek.…”

Section: Gambar 3 Uji Stabilitas Model Uji Cusum Dan Model Uji Cusumqunclassified

Penerapan Autoregressive Distributed Lag Dalam Memodelkan Pengaruh Inflasi, Pertumbuhan Ekonomi, Dan Fdi Terhadap Pengangguran Di Indonesia

Jumhur

2020

JEBIK

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This study aims to examine the effect of inflation, economic growth, and foreign investment on unemployment in Indonesia. Using the autoregressive distributed lag (ARDL) analysis method to analyze the 1991-2018 time series data collected from the World Bank's World Development Indicators database. The results found that inflation has a negative and significant effect in the short term but not significant in the long term in Indonesia. Economic growth has a negative and significant effect on both short and long-term unemployment in Indonesia, and foreign investment has a negative and significant effect on both short and long-term unemployment in Indonesia. Through the ARDL model, this research is able to prove that inflation, economic growth, foreign investment, and budgeting are proven to have long-term cointegration or move together in the long term. The four variables also have a dynamic short-term relationship that has a fairly high speed of adjustment towards equilibrium per year. Based on the results, policymakers, in this case the government must provide a conducive investment environment by eliminating the structural rigidity that exists in the economy to attract investment, both foreign and domestic investment, to encourage economic growth and create jobs in Indonesia.

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“…Empirical studies carried out in recent years have, in one way or the other, invalidated the trade-off between inflation and unemployment, as postulated by Phillips. For instance, [21,30] found a positive relationship to exist between inflation and unemployment, while [19] cited by [11] found a significant relationship between inflation and unemployment rates in Nigeria. Both high inflation rates and high unemployment rates have been observed to coexist, especially in developing countries (Nigeria inclusive), reflecting a situation known as stagflation.…”

Section: Introductionmentioning

confidence: 99%

Relationship Between Inflation and Unemployment: Testing Philips Curve Hypotheses and Investigating the Causes of Inflation and Unemployment in Nigeria

Samuel

Israel

Chibuzor

et al. 2021

PoS

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The attainment of full employment and price stability are one of the most widely used measures of economic health. Inflation and unemployment are an integral part of an economy; however, there is a need to balance both such that neither inflation nor unemployment is too high. The persistent rise in inflation and unemployment rates has called for the need to investigate the relevance of Philip's postulation of a trade-off between inflation and unemployment in Nigeria. In addition to the interdependency or independence of these variables, there is also a need to access factors that may contribute to the increasing inflation and unemployment rates in Nigeria. These will enable policymakers to formulate policies that affect inflation and unemployment and pay attention to other variables that may directly or indirectly affect inflation and unemployment. Therefore, the study aims to test the validity of Philip's curve hypotheses and examine possible causes of inflation and unemployment in Nigeria. The study used secondary data sourced from the Central Bank of Nigeria and the World Bank. Vector Autoregressive and Error Correction methods were adopted for the analysis. The study revealed that there is no significant relationship between inflation and unemployment in Nigeria. Inefficiencies from the government's side and insufficient domestic investment were observed to be the possible causes of unemployment, whereas; exchange rate depreciation and money supply are blamed for the rising price levels in Nigeria. The study concludes that the problems of inflation and unemployment arise from inefficiencies in both monetary and fiscal policies. Efficient use of fiscal and monetary policies was recommended to raise employment and output in all sectors to meet the steaming local demand and export. Also, the full implementation of economic diversification policies is recommended. Furthermore, the study recommends increasing government spending on social infrastructure and incentives to firms to promote investment in Nigeria. These will have an overall effect of increasing output, reducing unemployment and achieving non-inflationary growth in Nigeria.

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Understanding the Relationship between Unemployment and Inflation in Nigeria

Cited by 6 publications

References 3 publications

Effect of Minimum Wages on Inflation and Unemployment in East Java - Indonesia

Effect of Minimum Wages on Inflation and Unemployment in East Java - Indonesia

Penerapan Autoregressive Distributed Lag Dalam Memodelkan Pengaruh Inflasi, Pertumbuhan Ekonomi, Dan Fdi Terhadap Pengangguran Di Indonesia

Relationship Between Inflation and Unemployment: Testing Philips Curve Hypotheses and Investigating the Causes of Inflation and Unemployment in Nigeria

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