Inflation, Unemployment and the NAIRU in Greece

The current paper examines the Phillips Curve approach for Greece using annual data from 1980 until 2010. Phillips Curve approach helps in examining the relationship between inflation and unemployment. The results show that there is a long run and causal relationship between inflation and unemployment for the aforementioned period. Finally, the impulse responses applied for the 10-year forecasting, suggest that shocks in inflation rate cause a reduction on unemployment index for the first years, following by a slight rise for the remaining years under examination.