Adaptive Comparison of Phillips Curve and Determination of the Natural Rate of Unemployment in Iran

The issue of this paper is the relationships between inflation rate ,
unemployment rate and production, one of the main discussions in
macroeconomic models. This 'paper is an effort 'to determine the
relationship between the above- mentioned phenomenon in the short-and
in the long 11m as well as to calculate the natural rate of unemployed in
Iran. For this purpose, the theoretical models were tested using the time
series analysis as well as other econometric methods. The series were tested
as to their stationary and nonstationary nature. The results are as follows:
The existence of a significant relationship between inflation , rate and
unemployment rate in Iran was verified. We realized that there is a
negative relationship between the rate of inflation and that of
unemployment in Iran. As for ' the rational expectation theory, a
non-rational ' expectation model explained the expected inflation better
than weighted or adaptive expectations models. The hypothesis of the
natural rate of unemployment was tested using co - integration methods
and it was also verified. Given long run growth of productivity (1.7
percent), the natural rate of unemployment in Iran would be 7.6 percent