Examining the Relationship among Unemployment, Inflation, and Economic Growth

Abstract

This study aims to investigate the impact of unemployment and inflation on economic growth. Through regression analysis, the research reveals insightful findings regarding the relationship between these key macroeconomic variables. The regression results demonstrate that the coefficient of inflation is positive and statistically significant, indicating a notable effect on economic growth. This suggests that inflation exerts a substantial influence on the overall trajectory of economic growth, highlighting the importance of effectively managing inflationary pressures to support sustainable economic development. In contrast, the analysis finds that while unemployment is positively associated with economic growth, it does not exhibit statistical significance. This implies that while unemployment may have some influence on economic growth, its impact is relatively minor compared to other factors such as inflation. These findings underscore the importance of addressing inflationary trends as a priority for policymakers seeking to promote robust and sustainable economic growth. By implementing effective monetary policies and measures to control inflation, policymakers can create an environment conducive to investment, productivity, and overall economic stability. While unemployment remains an important concern, the study suggests that policies aimed at reducing unemployment may not have a significant direct impact on economic growth. Nonetheless, efforts to address unemployment through targeted interventions such as job training programs, labor market reforms, and social safety nets remain essential for promoting social welfare and inclusive economic growth. The study provides valuable insights into the complex dynamics between unemployment, inflation, and economic growth, highlighting the need for comprehensive policy approaches to foster a resilient and prosperous economy.