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The Phillips Curve in Bulgaria: Is the Trade-Off between Inflation and Unemployment Possible?

Author

Listed:
  • Ivan Todorov

    (Department of Finance and Accounting, South-West University Neofit Rilski, Bulgaria)

  • Gergana Angelova

    (Department of Tourism, South-West University Neofit Rilski, Bulgaria)

Abstract

The objective of this paper was to estimate the inflation-unemployment nexus and the opportunities for inflation-unemployment trade-off in Bulgaria. An ordinary least squares (OLS) regression of annual time series data for the period 2003-2022 was employed to test the Phillips curve hypothesis for Bulgaria. The results from the empirical analysis showed that: (i) a negative relationship (both linear and non-linear) exists between inflation and unemployment in Bulgaria; (ii) Bulgarian policy makers can decrease inflation by three percent at the cost of one percent increase in unemployment by implementing restrictive macroeconomic policies.

Suggested Citation

  • Ivan Todorov & Gergana Angelova, 2026. "The Phillips Curve in Bulgaria: Is the Trade-Off between Inflation and Unemployment Possible?," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 433-446, June.
    • Handle: RePEc:nwe:eajour:y:2026:i:2:p:433-446
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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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