Dynamics of Inflation and Unemployment in the Libyan Economy Based on the Phillips Curve Hypothesis

Abstract

This study aims to identify the relationship between inflation and unemployment in the Libyan economy during the period (1991-2024), a period that witnessed radical transformations in the Libyan economic and political structure. This is achieved by employing modern econometric tools, specifically the Bounds Test within the ARDL model, to verify the existence of a cointegration relationship between unemployment and inflation, and to test the validity of the classical Phillips curve hypotheses in light of the specific characteristics of the Libyan rentier economy, thereby paving the way for recommendations that contribute to achieving the desired economic stability.