Inflation and Unemployment : Is the Trade-Off Dead or Alive in Pakistan?

The aim of this paper is to identify the relationship between inflation and unemployment in Pakistan perspective of Phillips curve. A time series data is used for the period of 1984-2012. Inflation rate is taken as dependent variable while unemployment rate, exchange rate, trade (percentage of GDP) is taken as independent variables. Ordinary Least Squares (OLS) is used after assuring the stationary of the variables with the help of Augmented Dickey Fuller (ADF) test. The paper has found significant results: there is an inverse relationship between inflation and unemployment rate in Pakistan. Concept of Phillips curve hold true in case of Pakistan