Özet:

Inflation and unemployment, which indicate whether people want to work for different reasons, is one of the most fundamental problems that economic policyers are trying to solve. Inflation and unemployment are targeted by low inflation and low unemployment in economies because they lower the level of individual welfare, but these two goals are often conflicting. The relationship between inflation and unemployment is studied by the Phillips Curve approach, which shows that high inflation causes low unemployment and low inflation causes high unemployment. This is why policy makers, on the one hand, are trying to reduce inflation to ensure price stability; on the other hand, they are trying to increase total output, i.e. economic growth by reducing the unemployment rate. The aim of the study is to analyze the status of the relationship between inflation and unemployment to test the validity of the Phillips curve in Turkey during the 2005:1-2020:2 period. The study used monthly unemployment and inflation data obtained from the Turkish Statistical Bureau on the relevant period. In order to study the relationship between these two variables, first of all, the standing of the series was subjected to unit root tests. Then a matching test was applied to determine whether a long-term relationship exists. After the long-term relationship between the variables was detected, a vector error correction model (VECM) was predicted to determine the direction of the relationship.

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