The Validity of the Short Run and the Long Run Phillips Curve in Kenya

Levels of unemployment is great concern to policy makers in most world economies. Many models have been developed address the problem but no clear solution has found. Closely related inflation. Stagflation, a condition where both and inflation are high at same time resulted ineffectiveness policies issued by monetary authorities Kenya. Solutions challenges experienced many The purpose this study was empirically analyze validity Philips curve Kenyan economy. informed ever increasing rates, cost living inadequate attention inform made alleviate economy from problem. adopted an explanatory research design employed Auto-Regressive Distributed Lag (ARDL) Error Correction Model (ECM) short run long results. sample entailed annual secondary series data set for period 30 years 1991 2020, sourced KNBS, Central Bank Kenya, World Bank. findings concluded that relationship between positive insignificant run. Non-Accelerating Inflation Rate Unemployment (NAIRU) estimated be 6.26 percent insignificant. also showed money supply government expenditure had negative with recommends should not employ Phillips as instrument implementation This because positively related. Finally, come up supplementary cushioning against harsh effects structural breaks on