Inflation and Unemployment Trade-off: Is Phillips Curve True for African Developing Countries? Evidence from Sudan

Omer Allagabo Omer Mustafa (Department of Banking and Financial Studies, Sudan Academy for Banking and Financial Science, Khartoum, Sudan)

Article ID: 3243

Abstract


The relationship between wage inflation and unemployment (Phillips Curve) is controversial in economic thought, and the controversy is centered around whether there is always a trade-off or not. If this relationship is negative it is called The short-run Fillips Curve. However, in the long run, this relationship may probable not exist. The matter of how inflation and unemployment influence economic growth, is debatably among macroeconomic policymakers. This study examines the behavior of the Phillips Curve in Sudan and its effect on economic growth.


Keywords


Phillips curve; Trade-off; Economic growth; Sudan

Full Text:

PDF

References


[1] Knoema. (2021). Sudan Inflation Database. Available from: https://knoema.com/atlas/Sudan/Inflation-rate [accessed May 7, 2021].

[2] Knoema. (2021). Sudan Unemployment Database. Available from: https://knoema.com/atlas/Sudan/ Unemployment-rate# [accessed May 9, 2021].

[3] ILO. (2021). Sudan Population Database. Available from: http://www.ilo.org/public/english/bureau/stat/ res/index.htm [accessed May 9, 2021].

[4] Moloi, T., Marwala, T. (2020). The Phillips Curve. In: Artificial Intelligence in Economics and Finance Theories. Advanced Information and Knowledge Processing. Springer, Cham. Available from: https://link. springer.com/chapter/10.1007%2F978-3-030-42962-16 or https://doi.org/10.1007/978-3-030-42962-16.

[5] Phillips. A.W. (1958). The relation between unemployment and the rate of change of money wage rates in the United Kingdom (1861-1957). Economica New. 25(100), 283-299. Available from: Google Scholar [accessed May 4, 2021].

[6] Janet B. Kellett, Ronald H. Humphrey, and Randall G. Sleeth. (2006). Empathy and the emergence of task and relations leaders. The Leadership Quarterly. 17(2),146-162. Available from:https://www. researchgate.net/publication/222395260_Empathy_ and_the_emergence_of_task_and_relations_leaders [accessed May 16, 2021]. https://doi.org/10.1016/ j.leaqua.2005.12.003.

[7] Alisa., M. (2015). The Relationship between inflation and unemployment: a theoretical discussion about the Philips Curve. J Int Bus Econ 3:89–97. CrossRefGoogle Scholar.

[8] Robert G. King. (2008). The Phillips Curve and U.S. Macroeconomic Policy: Snapshots, 1958-1996. Economic Quarterly.94(4), 311–359. Available from: https://elearning.unito.it/sme/pluginfile.php/192712/ course/section/41483/King_Richmond08.pdf [accessed May 4, 2021].

[9] Fortin, P. (1991). The Phillips curve, macroeconomic policy, and the welfare of Canadians. Canadian Journal of Economics.24(4), pp. 774-803. Available from: https://www.jstor.org/stable/135693?seq=1#metadata_ info_tab_contents [accessed May 9, 2021].

[10] Robert, J. Gordon. (2008). The history of the Phillips curve: consensus and bifurcation. Economica 78(309):10–50. Available from: Google Scholar [accessed May 13, 2021].

[11] Peter B. Clark and Douglas, L. (1997). Phillips Curves, Phillips Lines and the Unemployment Costs of Overheating. IMF Working Paper, WP/97/17. Available from: https://www.imf.org/external/pubs/ ft/wp/wp9717.pdf [accessed May 9, 2021].

[12] GERGŐ., MOTYOVSZKI. (2013). The Evolution of Phillips Curve Concepts and Their Implications for Economic Policy. Central European University. Term Paper. Available from: https://me.eui.eu/gergomotyovszki/wp-content/uploads/sites/226/2016/12/ histecon_termpaper-evolution-of-Phillips-curveMotyovszki-1.pdf [accessed April 12, 2021].

[13] Thomas I. Palley. (2011). The Economics of the Phillips Curve: Formation of Inflation Expectations versus Incorporation of Inflation Expectations. Macroeconomic Policy Institute. Working Paper. No.4. Available from: https://core.ac.uk/download/ pdf/6702556.pdf [accessed May 11, 2021].

[14] Robert, J. Gordon. (2013). The Phillips Curve is Alive and Well: Inflation and the NAIRU During the Slow Recovery. NBER Working Paper No. 19390. Available from: https://www.nber.org/system/files/ working_papers/w19390/w19390.pdf [accessed May 4, 2021].

[15] Dritsaki, C., Dritsaki, M. (2013). Phillips curve inflation and unemployment: an empirical research for Greece. https://doi.org/10.1504/IJCEE.2013.056265.

[16] Alisa., M. (2015). The Relationship between inflation and unemployment: a theoretical discussion about the Philips Curve. J Int Bus Econ 3:89–97 CrossRefGoogle Scholar.

[17] Zayed, Islam, and Hassan. (2018). Testing Phillips Curve to Examine the Inflation Rate Regarding Unemployment Rate, Annual Wage Rate and GDP of Philippines: 1950-2017. Academy of Accounting and Financial Studies Journal. 22(5),1-9. Available from: Testing-Phillips-curve-to-examine-the-inflation-rateregarding-unemployment-rate-annual-wage-rate-andGDP-of-Philippines-1950-2017.pdf [accessed May 11, 2021].

[18] Karanassou, M., Sala., H. and Snower, J. (2006). Phillips curves and unemployment dynamics: Acritique and a holistic perspective. IZA-Institute of Labor Economics. IZA Discussion Working Papers, No. 2265. Available from: https://www.econstor.eu/ bitstream/10419/3856/1/dp2265.pdf [accessed April 28, 2021].

[19] Robert, J. Gordon. (2018). Friedman and Phelps on the Phillips Curve Viewed from a Half Century's Perspective. NBER Working Paper No. 24891. Available from: http://www.nber.org/papers/w24891 [accessed April 10, 2021].

[20] Voinea, L. (2018). Explaining the post-crisis Philips curve: cumulated wage gap matters for inflation. CEPS Working Paper No. 2018/05. Available from: Google Scholar [accessed May 1, 2021].

[21] Pratinidhi and Verma. (2020). Theoretical Relationship between Inflation and Unemployment: A Macro study. International Journal of Humanities. 9(2), 17–26. Available from: https://www.researchgate.net/publication/344298535 [accessed May 9, 2021].

[22] Esu, G. and Atan, Johnson. (2017). The Philip’s Curve in Sub-Saharan Africa: Evidence from Panel Data Analysis. MPRA Paper No. 82112. Available from: https://mpra.ub.uni-muenchen.de/82112/ [accessed May 9, 2021].

[23] Iyeli, E. (2017). Price expectation and the Philips Curve Hypothesis: The Nigerian Case. Int J Dev Econ Sustain. 5(4),1-10. Available from: Google Scholar [accessed May 9, 2021].

[24] McLeay and Tenreyro, S. (2019). Optimal Inflation and the Identification of the Phillips Curve. Available from: https://personal.lse.ac.uk/tenreyro/inflation1. pdf [accessed May 9, 2021].

[25] ILO. (2021), CBOS. (2019) Available from: http:// www.ilo.org/public/english/bureau/stat/res/index.htm and http://www.cbos.gov.sd.

[26] ILO. (2021), CBOS. (2019) Available from: http:// www.ilo.org/public/english/bureau/stat/res/index.htm and http://www.cbos.gov.sd.

[27] Knoema and CBOS. (2021). Sudan Database. Available from: https://knoema.com/atlas/Sudan/Humandevelopment-index and http://www.cbos.gov.sd [accessed April 30, 2021].

[28] Mustafa, O.A. O. (2020). The Role of Banking Finance and Monetary Policy in Enhancing Human Development Index in Sudan. International Journal of Economics and Financial.10(4), 64-68. https://doi. org/10.32479/ijefi.9902.

[29] Mustafa, O.A. O. (2021). History of Banking in Sudan (Conventional and Islamic): A Critical Review (1903-2019). International Finance and Bankin.8(1), 29-5. http://dx.doi.org/10.5296/ifb.v8i1.18740

[30] Knoema. (2021). World and Regional Statistic. Available from: https://knoema.com/atlas [accessed June 15, 2021].



DOI: https://doi.org/10.30564/jesr.v4i3.3243

Refbacks

  • There are currently no refbacks.
Copyright © 2021 Omer Allagabo Omer Mustafa


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.