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Inflation, output and unemployment trade-offs in Sub-Saharan Africa countries

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  • Johnson Worlanyo Ahiadorme

Abstract

This paper examines the behaviour of inflation, output, and unemployment in Sub-Saharan Africa (SSA) countries and shows that the predictions of the Phillips curve and Okun’s law are valid in the short run. In the long run however, the Okun’s law coefficient declines greatly and turns positive while the Phillips curve phenomenon gravitates towards the New Keynesian Phillips Curve (NKPC) but with a negative relationship. The evidence echoes Friedman’s proposition of a temporary trade-off between inflation and unemployment but no permanent trade-off. The output-unemployment relationship suggests that the long-term growth revival in SSA was neither inclusive nor pro-poor.

Suggested Citation

  • Johnson Worlanyo Ahiadorme, 2022. "Inflation, output and unemployment trade-offs in Sub-Saharan Africa countries," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 15(2), pages 140-159, May.
    • Handle: RePEc:taf:macfem:v:15:y:2022:i:2:p:140-159
    DOI: 10.1080/17520843.2021.1901347
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    Cited by:

    1. Sim, Chong Yang, 2021. "A Review on Output-Inflation Trade-off Based on New Classical and New Keynesian Theories," MPRA Paper 105767, University Library of Munich, Germany.
    2. Danlami Mujitapha & Norashida Othman & Rishan Sampath Hewage & Jaafar Pyeman & Khairul Aidah Samah, 2023. "A Verification of Okun’s Law: The Case of Southeast Asian Countries," Information Management and Business Review, AMH International, vol. 15(1), pages 54-65.

    More about this item

    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

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