The Relationship Between Unemployment and Inflation: Jordan as a Case Study

Macroeconomics has, out of the many debated matters to date, the connection between inflation and unemployment. This investigation is on the Phillips curve which displays the trade-off between inflation and unemployment and applies a dynamic autoregressive least squares methodology to data for the Jordanian economy from 1993 to 2022. The Johansen test was used to determine whether there is a cointegration relationship between inflation and unemployment. Results demonstrate that in the long run, the unemployment rate is statistically significant and negatively impacts on the inflation rate.