Abstract
Inflation and unemployment are two key elements in any market economy, and their relationship significantly impacts socio-economic conditions. This study examines the connection between Afghanistan's unemployment and inflation, providing crucial information for macroeconomic policymakers. The study explores the applicability of the Phillips Curve in Afghanistan's specific economic context. This study employs the Ordinary Least Squares (OLS) method to analyze data gathered from 2003 to 2021, aiming to identify patterns and relationships that may guide economic policy decisions. The results indicate a positive relationship between inflation and unemployment. However, this relationship is statistically insignificant, and there is no proof to substantiate the presence of a Phillips Curve in Afghanistan. This lack of alignment with traditional economic models underscores the necessity for tailored economic policies to address the specific challenges faced by the Afghan economy. The study highlights the importance of understanding local economic dynamics and suggests that policymakers should explore alternative approaches to managing inflation and unemployment, ultimately fostering sustainable economic growth.
Published Version
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