Analysis of the relationship between inflation and unemployment rate in the Black Sea Economic Cooperation Organisation countries

The relationship between inflation and unemployment rates has a critical place among economic indicators. Positive or negative changes in both factors may directly or indirectly affect the national economy. Inflation prevents stable growth in the economy, causes an increase in production costs and adversely affects income distribution, while unemployment leads to a decrease in the level of production and is two important macroeconomic problems that are undesirable in the economy. In theory, Philips curve analysis is used to explain the relationship between inflation and unemployment. The basis of the analysis is the work of Philips in 1958, which indicated that there is a negative relationship between monetary wages and price increases. Later, the analysis using the inflation rate was developed by Samuelson and Solow in 1960. The aim of this study is to examine the relationship between inflation and unemployment between Turkey and the member countries of the Organisation of the Black Sea Economic Cooperation and to test the validity of the hypothesis in the period 2005:01-2022:04. In the study, the effect of the changes in the inflation rate on the unemployment rate in each month of the relevant period is analysed with the information provided by the Turkish Statistical Institute and the World Bank.