Assessment of the relationship between unemployment
and inflation in the Russian economy
The purpose of the study is to determine the relationship between inflation and unemployment in the Russian economy. The long-term period (annual data for 2007-2019) and the short-term period (monthly data for 2016-2019) are analyzed. The methods of correlation and regression analysis, analysis of variation series were used. As a result of the study, it was found that in the long run, there are no direct or inverse links between inflation and unemployment. The ratio of inflation to unemployment did not fit the Phillips curve. In the short term, in some years, there is a positive correlation between inflation and unemployment, while they simultaneously decrease. In 2016, 2019, to a lesser extent in 2017, this was due to deflation in July-September and a seasonal growth in labor demand. If seasonal deflation does not occur, there is no correlation between inflation and unemployment even in the short run. Consequently, the impact of unemployment on inflation in Russia is weak and volatile. In the first 9 months of 2020, inflation and unemployment trends are getting closer to each other, but the relationship is not statistically significant. This is due to job cuts amid the novel coronavirus pandemic, while inflation remains stable.
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