EVOLUTION OF INFLATION-UNEMPLOYMENT RELATIONSHIP IN THE PERSPECTIVE OF ROMANIA’S ACCESSION TO EU

The author uses two models derived from the general model of stagflation in order to analyze long term trends of inflation-unemployment relationship. The first model assumes a simple linear correlation between unemployment and the growth rate of GDP, while inflation is a parabolic function of GDP. The second model extends the first one by reformulating the unemployment as depending in a quadratic way on production. Based on the second model, the author has also identified that transition passed through five distinct phases.