Degree Name
Master of Science
Department or Program
Economics
Advisor
Becsi, Zsolt L.
Abstract
This research gives an overview of the history of the Phillips Curve, as well as the results of studies done in the recent years. In contrast to previous research that uses national-level data, this research uses state-level data for inflation and unemployment over the years 1976-2007. Using a graphical and statistical analysis of the relationship between the inflation and unemployment in the Unites States, we were able to find a relationship exists between lagged unemployment and current inflation in most of the states and most of the years. Panel data analysis with fixed effects and random effects results are highly significant and support Phillips Curve theory. While the analysis supports a national Phillips Curve, our results do not support a significant relationship for all states individually, though 28 states were significant.