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The Relationship between Inflation and Unemployment: Theoretical Aspects and Particularities of Manifestation in the Russian Economy

Author: Vladimir V. Ilyashenko

Abstract:

The article studies theoretical aspects of the relationship between inflation and unemployment, short-term and long-term Phillips curves. The impact of expected inflation, unemployment and supply shocks on the actual rate of inflation is shown. The paper gives theoretical approaches to determining the particularities of the relationship between inflation and unemployment in the short and long run. Having analyzed the development of the Russian economy the author established the ambiguous relationship between inflation and unemployment, which is reflected by the Phillips curve. The Russian economy has seen both the stages of development, when the rate of inflation and unemployment tended to decrease in conditions of economic growth, and the stages, when inflation and unemployment rates increased in times of economic crisis. It is concluded that to a large extent this was due to a significant increase in world oil prices and devaluation of the national currency.

Keywords: inflation; unemployment; the Phillips curve; aggregate demand; stagflation; foreign economic inflation.

For citation:

Ilyashenko V. V.The Vzaimosvyaz' inflyatsii i bezrabotitsy: teoreticheskie aspekty i osobennosti proyavleniya v ekonomike Rossii [Relationship between Inflation and Unemployment: Theoretical Aspects and Particularities of Manifestation in the Russian Economy]. Izvestiya Uralskogo gosudarstvennogo ekonomicheskogo universiteta – Journal of the Ural State University of Economics, 2016, no. 2 (64), pp. 5–11.