The Phillips curve in agriculture: interaction of inflation and unemployment

Abstract

The goal is to analyze the manifestation of the Phillips curve on practical material. Methods – comparative, systemic, statistical, classification. Results – the authors examine the relationship between inflation and unemployment from 1991 to 2021 in the Republic of Kazakhstan through the Phillips curve. The possibility of its application for Kazakhstan economy is considered. The relevance of the article is determined by the fact that in agriculture, depreciation of money and unemployment has negative impact in the form of disproportionate development, reduced investment activity, socio-economic instability, underproduction of gross product, and redistribution costs. This requires assessment of current trends in labor market, which is an indicator of living standard of population. The degree of inflationary processes (independent variable) and unemployment (dependent variable) in dynamics for domestic agricultural sector is analyzed. The relationship of human potential with the rate of decline in purchasing power is reflected. Using statistical data, Phillips curve was constructed for a longterm period. Correlation comparison of unemployment and increase in prices for goods and services has been carried out. The dependence between the studied variables for agro-industrial complex of the republic was tested. Conclusions – the results indicate the presence of relationship which is consistent with scientific concept of A. Phillips between inflation and unemployment in certain years. The periods when there is no feedback between them predominate. There is a simultaneous increase in inflation and unemployment and their decrease. However, even after 64 years, the Phillips curve, supplemented by the studies of E. Phelps and M.Friedman, is a tool for macroeconomic analysis, implementation of macroeconomic knowledge.