Abstract
Central Asian Republics have been facing high unemployment rates and inflation problems since they established. This work is based on the Phillips curve, which deals the opposite relationship between inflation and unemployment. In the article, unemployment rates and Consumer Price Index (CPI) are used. Within this work, the relationship between inflation and unemployment is examined by the panel data analysis for Azerbaijan, Kazakhstan, Kyrgyzstan, Macedonia and Turkey (1996-2012).We acquired the data of this work from the web site of the IMF. Panel Unit Root Tests are used in order to test stagnation of the data. Afterwards Cointegration Test and Panel Causality Test are used. After that panel cointegration and panel causality tests were made to learn if a cointegral relationship was occurred between inflation and unemployment rate or not. As a result of this study we done, the data level is not stable. Because of that reason, we took the difference of them. There is a one-sided causal relation from inflation to unemployment rates in Turkey and other countries.
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